OKAY. GOOD AFTERNOON, THE
SENATE'S COMMITTEE ON THE
CALIFORNIA'S WINE INDUSTRY WILL
COME TO ORDER THE LEGISLATURE
CONTINUES TO WELCOME BACK THE
PUBLIC AND PROVIDED ACCESS TO
BOTH IN PERSON AND
TELECONFERENCE. PARTICIPATION
FOR PUBLIC COMMENT. FOR
INDIVIDUALS WISHING TO PROVIDE
PUBLIC COMMENT VIA THE
TELECONFERENCE LINE. THE SERVICE
PARTICIPANT 12 FREE NUMBERS 8772
TO 6. EIGHT MONTHS 63 AND THE
ACCESS CODE 736 TO 832. FOR
TODAY'S HEARING WILL HEAVEN THE
MEMBERS OF EACH PANEL GIVE THEIR
PRESENTATION FOLLOWED BY
QUESTIONS FROM THE COMMITTEE AT
THE CONCLUSION OF THE SECOND
PANEL, WE WILL TAKE PUBLIC
COMMENT ON EITHER OF THE AGENDAS
ITEMS. I REALLY WANT TO THANK MY
CO CHAIR SENATOR MCGUIRE AND HIS
STAFF FOR THEIR EFFORTS FOR
ORGANIZING TODAY'S HEARING.
ALWAYS APPRECIATE THE
OPPORTUNITY TO WORK TOGETHER ON
BEHALF OF OUR NEIGHBORING
DISTRICTS, ESPECIALLY ON AN
ISSUE THAT PLAYS SUCH A CRITICAL
ROLE IN OUR ECONOMY. AND I ALSO
LIKE TO THANK OTHER MEMBERS OF
SENATOR ALVARADO. GUILT THANK
YOU VERY MUCH FOR ATTENDING
TODAY. OF COURSE. AS MANY OF YOU
KNOW, THE AGRICULTURE IS NUMBER
ONE INDUSTRY IN CALIFORNIA,
CONTRIBUTING $55 BILLION TO OUR
ECONOMY. NOW WHY GRAPES FOR THE
NUMBER TWO CROP GROWN IN THE
STATE AT AN ESTIMATED VALUE OF
5.5 BILLION, GENERATING NEARLY
90 BILLION IN ECONOMIC ACTIVITY.
IN THE STATE OF CALIFORNIA. I
HAVE HAD THE PRIVILEGE OF
REPRESENTING THE DISTRICT WHERE
WINE GRAPES ARE NUMBER ONE
INDUSTRY. IN THREE OF MY 53 OF
MY SIX COUNTIES, NAPA, SONOMA
AND SACRAMENTO IN THE REMAINING
THREE WINE GRAPES ARE THE TOP
CROP. THE WINE INDUSTRY
EMPLOYEES OVER 420,000 PEOPLE IN
CALIFORNIA. OBVIOUSLY THE WINE
INDUSTRY IS CRITICAL TO
CALIFORNIA ECONOMY. IT'S UP TO
ALL OF US TO WORK TOGETHER TO
HELP THIS MAJOR INDUSTRY PROSPER
AND GROW DURING THESE
CHALLENGING TIMES. I AM VERY
INTERESTED TO HEAR FROM THE
DEPARTMENT OF INSURANCE AND
CALORIE CYCLE ABOUT THEIR PLANS
TO ENSURE THE LONG TERM HEALTH
OF THE WINE INDUSTRY AND STATE
OF CALIFORNIA. THE FIRST PANEL
DAY WILL ADDRESS INSURANCE
CHALLENGES IN THE WINE INDUSTRY
AND WILL BE MODERATED BY SENATOR
MCGUIRE. WITH THAT I WILL HAND
THE MIC TO SENATOR MCGUIRE FOR
WELCOMING REMARKS AND HE WILL
MODERATE PANEL NUMBER ONE. THANK
YOU SO MUCH, MR CHAIR AND FIRST
AND FOREMOST, I JUST WANT TO SAY
THANK YOU, SENATOR DODD FOR YOUR
INCREDIBLE WORK. YOU HAVE BEEN
TIRELESS IN YOUR WORK FOCUSED ON
TACKLING THE TOUGH ISSUES THAT
MANY COUNTIES IN ONE COUNTRY IN
THE WINE INDUSTRY FACE EACH AND
EVERY DAY WE WOULD NOT BE HERE
TODAY WITHOUT YOUR LEADERSHIP,
AND IT IS ONE ACKNOWLEDGE THAT I
ALSO WANT TO SAY GOOD AFTERNOON
AND SO GOOD TO SEE EACH AND
EVERY ONE OF YOU. THANK YOU FOR
TAKING THE TIME OUT OF YOUR BUSY
SCHEDULES TO BE ABLE TO BE HERE
WITH EACH OF US WANT TO SAY
THANK YOU TO SENATOR DODD'S
INCREDIBLE TEAM ALONG WITH THE
TEAM FROM OUR OFFICE FOR PUTTING
IN THE HEAVY LIFTING AS WELL
COMING INTO TODAY'S HEARING, AS
SENATOR DAD HAD JUST ELOQUENTLY
STATED. CALIFORNIA IS A GLOBAL
LEADER. WHEN IT COMES TO WINE.
IT IS A MAIN ECONOMIC DRIVER FOR
THE GOLDEN STATE. OUR WINE
INDUSTRY SUPPORTS COMMUNITIES BY
GENERATING LITERALLY TENS OF
BILLIONS OF DOLLARS IN ECONOMIC
IMPACT AND EMPLOYS HUNDREDS OF
THOUSANDS OF HARD WORKING
CALIFORNIANS EACH AND EVERY YEAR
IN THE INDUSTRY PAYS BILLIONS OF
DOLLARS IN STATE AND LOCAL TAXES
. AND HERE'S WHAT WE KNOW THE
BOTTOM LINE IS THIS WHEN THE
WAGON INDUSTRY THRIVES.
CALIFORNIA IS SUCCESSFUL. IN
PREVIOUS HEARINGS, THIS
COMMITTEE IS FOCUSED ON
IMPORTANT TOPICS SUCH AS
FARMWORKER HOUSING, WATER SUPPLY
, SUSTAINABILITY AND FISH FROM
THE FARMING AND WE DEVOTED TO
HEARINGS TO THE IMPACTS RECENT
MASSIVE FIRESTORMS HAVE HAD ON
THE INDUSTRY AND HOW THE STATE
CAN HELP IN RECOVERY. AND AS THE
GOOD SENATOR FROM NAPA JUST
SAID, WE'RE GOING TO FOCUS ON
TWO NEW CRITICAL CHALLENGES
FACING CALIFORNIA'S WINE
INDUSTRY, WINERY INSURANCE AND
BOTTLE BILL. ALL IMPLEMENTATION
DO A LITTLE BIT OF A DEEP DIVE
INTO OUR FIRST PANEL. OUR FIRST
PANEL IS GOING TO FOCUS ON THE
CHALLENGING ISSUE OF WILDFIRE
INSURANCE COVERAGE FOR WINERIES,
LIKE OTHER BUSINESS SECTORS HERE
IN CALIFORNIA, GOLDEN STATE WINE
GROWERS AND PRODUCERS ARE FACING
AN UNPRECEDENTED INSURANCE.
CRISIS AS INSURANCE CARRIERS TO
STOP RENEWING POLICIES AND WINE
REGIONS THROUGHOUT THE STATE.
WINERIES AND PRODUCTION
FACILITIES ARE FACED WITH A
DIMINISHING CHOICE OF POLICY
PROVIDERS. AND TO MAKE MATTERS
WORSE, AS WE HAVE ALL HEARD
PREMIUMS ARE SKYROCKETING, WHICH
LEADS BUSINESS IS VULNERABLE TO
BE BECOME. UNDERINSURED OR HOLY
UNINSURED THAT WE'RE SEEING MORE
AND MORE FROM THIS CRISIS IS A
SERIOUS THREAT TO THE FUTURE OF
ONE OF OUR STATES, MOST ROBUST
AGRICULTURAL INDUSTRIES. OUR
SECOND PANEL IS GOING TO FOCUS
ON THAT BOTTLE BILL
IMPLEMENTATION AND I WOULD BE
REMISS IF I DIDN'T SAY THANK YOU
TO SENATOR DODD INTO OUR
FANTASTIC PROTEIN, TONI ATKINS
FOR THEIR WORK ON SP 1013 AND
2022, BRINGING BOTH WINE AND
SPIRITS IN THE CALIFORNIA'S
NUMBER ONE RECYCLING PROGRAM.
THE LAST PIECE WOULD LIKE TO BE
AT A MENTION. IS THIS THE WINE
INSTITUTE WE NEED TO SAY THANK
YOU TO THE WINE INSTITUTE FOR
THEIR HELP IN GETTING THIS
HEARING, ORGANIZING TOGETHER IN
THEIR INVALUABLE PARTNERSHIP,
YEAR AFTER YEAR AFTER YEAR, AND
WE'RE TRULY GRATEFUL. THANK YOU
AGAIN FOR JOINING US, AND IT IS
NOW MY PLEASURE THROUGH THE
CHAIR, TURN TO THE INDIVIDUAL TO
MY RIGHT. WE ARE GRATEFUL FOR
HER LEADERSHIP ON ALL ISSUES
THAT AG AND IN PARTICULAR,
UNWIND GRATEFUL THAT SENATOR
ALVARADO GILLIS HERE SENATOR
WILL TURN THE FLOOR OVER FOR ANY
WELCOMING REMARKS. THANK YOU SO
MUCH WHILE I'M BRINGING THE
HEALTHY COMPETITION TO
CALIFORNIA IN THE WINE INDUSTRY,
REPRESENTING MY HOME COUNTY OF
AMADOR COUNTY, AS WELL AS THE
SIERRA FOOTHILLS REGION OF WINE
COUNTRY HERE IN CALIFORNIA, SO I
FEEL VERY PRIVILEGED AND HONORED
TO SIT HERE WITH WITH TWO OF THE
OUR VETERANS AND THE WINE
INDUSTRY AS I AM. UM I AM GIVING
SOME MENTORING ON HOW TO BEST
REPRESENT THE REGION. THANK YOU
SO MUCH. I DO PRIDE MYSELF AS
BEING A RURAL MEMBER AND PART OF
BEING A REPRESENTATIVE OF THE
RURAL COUNTIES IS REPRESENTING
AGRICULTURE AND AS MENTIONED,
THE WINE INDUSTRY HAS BEEN ONE
OF THE MOST PROSPEROUS IN OUR
AREA, AND I FEEL VERY HAPPY TO
REPRESENT THEM. IT IS A LARGE
CONTRIBUTOR TO OUR AGRICULTURAL
STRENGTH AND ECONOMY AS A WHOLE
AS YOU MENTIONED AND IN MY
DISTRICT COVERING THE CENTRAL
FOOTHILLS, AS WELL AS THE
CENTRAL VALLEY WINE IN THE WINE
INDUSTRY INCREASES AND EXPANDS,
PROVIDING TOP TIER TOURISM,
WHICH IS A BIG, BIG ECONOMIC
FACTOR FOR US. I WANT TO
HIGHLIGHT AS COMING IN AS THE
NEW BE HERE WITH OUR HEALTHY
COMPETITION. THAT WE HAVE OVER
70 WINERIES IN ELDORADO OVER 50
RIGHT WINERIES AND AMADOR
COUNTY, 20. CALVARY'S AND OVER A
DOZEN STANISLAS, INCLUDING THE
FAMED FAMILY OWNED AND RUN E AND
J. GALLO WHICH HAS TODAY WE'RE
GOING TO BE LEARNING ABOUT
BOTTLING, RECYCLING AND E AND J.
GALLO HAS BEEN A LEADER IN THAT,
SO I FEEL VERY, VERY PRIDEFUL TO
BE ABLE TO REPRESENT THAT
REGION, SO I THINK IT'S
IMPORTANT FOR US TO TALK ABOUT
THE OBSTACLES FACING OUR
INDUSTRY AND THANK YOU AGAIN FOR
THE OPPORTUNITY TO BE PART OF
THIS DISCUSSION. THANK YOU
REALLY GREAT, REMISS NOT
NOTICING THAT ROMBAUER IS NOW
OWNED BY E. J. WHICH IS A, WHICH
IS AN AMATEUR COUNTY AS WELL.
ELDORADO IS YES, IT'S ALL IN THE
FAMILY. NOW. IT'S ALL IN THE
FAMILY. YES YOU'RE GONNA BE IN
TROUBLE FROM DELGADO. IF YOU
DIDN'T MENTION THAT WE GO. I
SANG. I LOVE IT. I LOVE IT A
GOOD STUFF. YEAH ABSOLUTELY. SO
WITHOUT FURTHER ADO, LADIES AND
GENTLEMEN, WE'D LIKE TO BE ABLE
TO KICK OFF THIS ESTEEMED
COMMITTEE BY WELCOMING SEVERAL
INDIVIDUALS UP TO THE TABLE. IF
WE COULD PLEASE BRING UP MICHAEL
MARTINEZ AND MICHAEL IS THE
CHIEF DEPUTY COMMISSIONER FOR
THE CAPITAL DEPARTMENT
INSURANCE. WE'RE GOING TO
WELCOME SOME MARTINEZ TO THE
TABLE HERE TO THE FRONT. WE ARE
GRATEFUL THAT SHOT. SEE
THROCKMORTON IS HERE. WE'RE
GOING TO HAVE MR THROCKMORTON TO
PLEASE COME FORWARD TO THE TABLE
AS WELL. GENERAL MANAGER AND
PREPARE IT FOR RELIC. WINE
CELLARS. THANK YOU SO MUCH FOR
BEING HERE AND DAVID CAPONE AND
ENERGY PARTNER OF MALLOY, EMERY
INVESTORS, CONEY INSURANCE
SERVICES THAT SPECIALIST IN
INSURANCE FOR THE WINE INDUSTRY.
SO LADIES AND GENTLEMEN, SOME
HOUSEKEEPING IN REGARDS TO THIS
PANEL WE'RE GOING TO HAVE ABOUT
20 MINUTES. 30 MINUTES TOTAL.
WE'RE GOING TO ASK EACH PANELIST
TO BE ABLE TO KEEP THEIR REMARKS
TO APPROXIMATELY FIVE MINUTES
WILL GIVE YOU A 32ND WARNING. AS
YOU APPROACH THAT FIVE MINUTES.
WE CANNOT SAY THANK YOU ENOUGH
FOR YOUR WILLINGNESS TO
PARTICIPATE HERE TODAY AND TO BE
ABLE TO BRING YOUR PERSPECTIVE
ON THIS CRITICAL ISSUE OF
INSURANCE AND THE CRISIS THAT SO
MANY VINTNERS FACE, SO LET'S
KICK OFF. WE WELCOME MR MARTINEZ
ON BEHALF OF COMMISSIONER
RICARDO LARA. MR MARTINEZ. IF
YOU COULD PLEASE PASS ON HER
SINCE HERE, THANKS TO THE
COMMISSIONER FOR ALL THIS HARD
WORK. THIS HAS BEEN AN
INCREDIBLY CHALLENGING TIME FOR
THE DEPARTMENT. YOU'RE WORKING
THROUGH SOME REALLY DIFFICULT
ISSUES, AND WE'RE GRATEFUL FOR
YOUR HARD WORK. AND THANKS FOR
YOUR PARTNERSHIP TODAY. THANK
YOU. THANK YOU, SENATOR MCGUIRE.
THANK YOU VERY MUCH FOR THE KIND
WORDS I WILL ABSOLUTELY CONVEY
THAT TO HIM AND, OF COURSE, AS
LONG STANDING FRIENDSHIP WITH
ALL THREE OF YOU, SENATORS,
THANK YOU VERY MUCH. MICHAEL
MARTINEZ, CHIEF DEPUTY
COMMISSIONER AT THE CALIFORNIA
DEPARTMENT OF INSURANCE UNDER
THE LEADERSHIP OF INSURANCE
COMMISSIONER RICARDO LARA, THANK
YOU FOR INVITING ME HERE TODAY.
DO YOU HAVE SOME PREPARED
REMARKS, AND I DO APPRECIATE THE
COMMITTEE FOR REACHING OUT TO ME
TO TALK ABOUT THE CONTINUED YET
WE DO HAVE A PATHWAY. WE BOTH
STRONGLY BELIEVE ON THE
INSURANCE CHALLENGES FACING OUR
STATE UNDER THE LEADERSHIP OF
COMMISSIONER LOTTO WITH THE
DEPARTMENT HAVE TAKEN AND
CONTINUE TO TAKE SIGNIFICANT
STEPS TO INCREASE. THE
AVAILABILITY OF INSURANCE FOR
CONSUMERS TO MAINTAIN A
COMPETITIVE INSURANCE MARKET
UNDER THE AUTHORITY GRANTED TO
THE INSURANCE COMMISSIONER BY
CALIFORNIA VOTERS IN THE PASSAGE
OF PROP ONE OF THREE BACK IN
1988, OR DEPARTMENT EXPERTS ARE
ENTIRELY FOCUSED WAS ABOUT 1400
OF THEM AT THE DEPARTMENT.
THEY'RE ENTIRELY FOCUSED ON
IMPROVING THE LIVES OF
CALIFORNIANS. THE DEPARTMENT'S
INVESTIGATION OF COMPLAINTS AND
OVERSIGHT OF THE CONDUCT OF
INSURANCE COMPANIES FOLLOWING
WILDFIRES HAVE HAS RESULTED IN
MORE THAN $469 MILLION RETURNED
TO CONSUMER SINCE 2018 BENEFITS
THAT WE BELIEVE WE'RE NOT BEEN
NOT HAVE BEEN RECOVERED WITHOUT
THE DEPARTMENT'S ACTIONS AGAIN.
I WAS ASKED BY COMMITTEE STAFF
TO PROVIDE A BRIEF, HIGH LEVEL
OVERVIEW OF THE DEPARTMENT'S
ROLE IN ENSURING A ROBUST AND
COMPETITIVE COMMERCIAL INSURANCE
MARKETPLACE. I WOULD ALSO ADD A
STABLE AND PREDICTABLE
COMMERCIAL INSURANCE
MARKETPLACE, GIVEN TODAY'S
HEARINGS. TITLE AND ESPECIALLY
AS IT PERTAINS TO THE STATES
WINE INDUSTRY, INCLUDING OUR
STEPS TAKEN TO MODERNIZE THE
CALIFORNIA FAIR PLAN ASSOCIATION
TO BE MORE RESPONSIVE TO THE
NEEDS OF CALIFORNIA'S BUSINESSES
AND CONSUMERS. COMMISSIONER
BELIEVES HAVING A ROBUST AND
COMPETITIVE INSURANCE MARKET IS
CRITICAL TO PROTECTING
CALIFORNIANS FROM THESE
INCREASED RISKS, INCLUDING
CLIMATE INTENSIFIED WILDFIRES.
FURTHERMORE HE HAS BEEN VERY
CLEAR THAT BENEFITS TO AND
PROTECTION OF CONSUMERS OR ABOUT
MOST IMPORTANCE AS WE STRIVE TO
MEET HIS INTERLOCKING GOALS,
NAMELY ONE MAKING INSURANCE MORE
AVAILABLE TO CALIFORNIANS.
SECONDLY, CREATING A RESILIENT
INSURANCE MARKET. AND THIRDLY,
PROTECTING COMMUNITIES FROM
CLIMATE CHANGE. THAT IS WHY HE
PARTNERED WITH THE GOVERNOR'S
ADMINISTRATION, INCLUDING
SEVERAL OF HIS EMERGENCY
PREPAREDNESS, GOVERNMENTAL
ENTITIES. ENGAGED WITH
STAKEHOLDERS THOROUGHLY OVER
THREE YEARS' TIME AND USE OUR
COLLECTIVE EXPERTISE TO CREATE
THE FIRST IN THE NATION
INSURANCE PRICING REGULATION
THAT REQUIRES ALL INSURANCE
COMPANIES TO RECOGNIZE AND
REWARD WILDFIRE MITIGATION
EFFORTS MADE BY BUSINESSES,
HOMEOWNERS AND COMMUNITIES UNDER
HIS REGULATION, COMMERCIAL AND
HOMEOWNER INSURANCE COMPANIES,
INCLUDING THOSE IN THE WINERY
INDUSTRY, ARE UM, THOSE THOSE
ARE IN THE WINE INDUSTRY THAT
ARE CONSUMERS OF INSURANCE BY
INSURANCE COMPANIES THAT THOSE
INSURANCE COMPANIES ARE REQUIRED
TO REWARD THOSE ACTIONS LIKE
UPGRADED ROOFS AND WINDOWS
DEFENSIBLE SPACE IN LIVING IN
FIRE WISE COMMUNITIES AS WE'VE
HEARD. EVERY DOLLAR. PRE
DISASTER MITIGATION, SAVES 5 TO
$7 AND AVOIDED FUTURE INSURANCE
LOSSES, THUS HELPING MAKE
INSURANCE MORE AVAILABLE AND
ULTIMATELY AFFORDABLE
TRANSPARENCY IS ANOTHER
IMPORTANT BENEFIT OF IS THE
REGULATION REQUIRING INSURANCE
COMPANIES TO PROVIDE CONSUMERS
AND PROPERTY OWNERS WITH THEIR
PROPERTIES RISK SCORE AND THE
RIGHT TO APPEAL THAT SCORE. SO
THE BIG NEWS RECENTLY HAS BEEN
UNDER RECENTLY ON SEPTEMBER 21ST
COMMISSIONER LOTTA ANNOUNCED TO
SUSTAINABLE INSURANCE STRATEGY
AIMED AT IMPROVING INSURANCE
CHOICES AND PROTECTING
CALIFORNIANS FROM INCREASED
CLIMATE CHANGE THREATS, ALL
ADDRESSING THE LONG TERM
SUSTAINABILITY OF THE NATION'S
LARGEST INTEREST ASSURANCE
MARKET. HIS STRATEGY WAS
ANNOUNCED IMMEDIATELY AFTER THE
GOVERNOR ISSUED AN EXECUTIVE
ORDER, PROMPTING IMMEDIATE
ACTION. REGULATORY ACTION IN
SUPPORT OF THE COMMISSIONER'S
ACTIONS FOR COMMUNITIES AFFECTED
BY CLIMATE CHANGE KEY REGULATORY
ELEMENTS OF THE COMMISSIONERS
STRATEGY INCLUDE ONE EXECUTIVE
ACTION TO TRANSITION BUSINESSES
AND HOMEOWNERS FROM THE FAIR
PLAN BACK INTO THE ADMITTED
INSURANCE MARKETPLACE WITH
COMMITMENTS FROM INSURANCE
COMPANIES INCLUDED COMMERCIAL TO
COVER ALL PARTS OF CALIFORNIA BY
WRITING NO LESS THAN 85% OF
THEIR STATEWIDE MARKET SHARE. IN
HIGH WILDFIRE RISK COMMUNITIES,
FOR EXAMPLE, IF THE COMPANY
RIGHTS 20 OUT OF 100 HOMES OR
BUSINESSES STATEWIDE. IT MUST
RIGHT 17 OUT OF 100 HOMES IN A
DISTRESSED AREA, GIVING SECONDLY
, GIVING FAIR PLAN POLICYHOLDERS
WHO COMPLY WITH COMMISSIONER
LOTTA'S SAFER FROM WILDFIRES
REGULATION FIRST PRIORITY FOR
TRANSITION TO THE ADMITTED
MARKET, THUS ENHANCING THE
STATE'S OVERALL WILDFIRE SAFETY
EFFORTS. THIRDLY EXPERT IZING
THE DEPARTMENT'S INTRODUCTION OF
NEW RULES FOR THE REVIEW OF
CLIMATE. CATASTROPHE MODELS THAT
RECOGNIZED THE BENEFITS OF WILD
FIRE SAFETY AND MITIGATION
ACTIONS AT THE STATE, LOCAL AND
PARCEL LEVELS. FOURTHLY
DIRECTING THEM FAIR PLAN TO
FURTHER EXPAND COMMERCIAL
COVERAGE TO 20 MILLION PER
BUILDING TO CLOSE INSURANCE CAPS
FOR WINERIES, HOMEOWNERS
ASSOCIATIONS AND CONDOMINIUM
DEVELOPMENTS, AMONG OTHERS TO
HELP MEET THE STATE'S HOUSING
GOALS. AND TO PROVIDE REQUIRED
COVERAGE TO LARGE BUSINESSES IN
THE STATE, SICILY, HOLDING
PUBLIC MEETINGS EXPLORING
INCORPORATING CALIFORNIA ONLY
NET REINSURANCE COSTS INTO RAPE,
VIOLENCE AND SIXTH IMPROVING
INSURANCE COMPANY RATE, FILING
PROCEDURES AND TIMELINES BY AND
FORCING THE REQUIREMENT FOR
INSURANCE COMPANIES TO SUBMIT A
COMPLETE RATE FILING AS WELL AS
HIRING ADDITIONAL DEPARTMENT
STAFF. TO REVIEW RATE
APPLICATIONS AND INFORMED
REGULATORY CHANGES, OTHER
TRANSPARENCY, ACCOUNTABILITY AND
PUBLIC PARTICIPATION REFORMS. I
WOULD SAY THAT A LOT OF THE
INSPIRATION FOR COMMISSIONER LOT
ISN'T SUSTAINABLE INSURANCE
STRATEGY. COMES FROM THE
COUNTLESS MEETINGS IN TOWN HALLS
THAT HE HAS HAD SOME IN
PARTNERSHIP WITH YOU AND YOUR
COLLEAGUES HERE IN THE STATE
LEGISLATURE, AND THEY'VE BEEN UP
AND DOWN THE STATE. HE'S HE'S
PLANNED THEM. HE'S ATTENDED THEM
ACROSS THE STATE SINCE 2019,
INCLUDING WITH MANY VINTNERS,
WILD WINE, GRAPE GROWERS,
WINEMAKERS AND FARM BUREAU'S,
MANY OF WHOM HE HAS HELD SEVERAL
DISCUSSIONS AND LISTENING TOURS
WITH THAT PARTICULAR POPULATION.
AND CONSTITUENCY SINCE 28 2019
TO INFORM HIS THINKING IN
STRATEGIES, IN FACT, ADDITIONAL
ACTIONS THAT HE HAS TAKEN TO
MODERNIZE THE FAIR PLAN WERE
BASED ON CONSTRUCTIVE MEETING
CITY IS HELD WITH THE STATE'S
WINE INDUSTRY, INCLUDING
ORDERING THE FAIR PLAN TO
INCREASE ITS COMMERCIAL COVERAGE
LIMITS FOR BUSINESSES FOR THE
FIRST TIME IN MORE THAN TWO
DECADES TO KEEP PACE WITH
INCREASED COSTS. WE HAVE ABOUT A
MINUTE, MR. THANK YOU. SECONDLY
SUPPORTING AND OVERSEEING
IMPLEMENTATION OF THIS NEW STATE
LAW FROM A FEW YEARS AGO, SENATE
BILL 11, ALLOWING THE FAIR PLAN
TO COVER AG BUSINESSES. AND CO
SPONSORING A SPONSORED MEASURE
EARLIER THIS YEAR WITH A
CALIFORNIA FARM BUREAU
FEDERATION TO CREATE THE FAIR
PLAN COMMERCIAL COVER
CLEARINGHOUSE TO HELP GET
COMMERCIAL POLICYHOLDERS BACK
INTO THE MID INSURANCE MARKET.
CAN I DO WANT TO ACKNOWLEDGE THE
CONTINUED SUPPORT AND
PARTNERSHIP THAT HE HAS HAD WITH
YOU ALL HERE IN THE STATE
LEGISLATURE? IT DOES MEAN A LOT
TO HIM, ESPECIALLY HIS FORMER
COLLEAGUES HERE IN THE STATE
SENATE. IT HAS BEEN TOUGH. I DO
APPRECIATE THE CO CHAIRS,
REMARKS, BUT IT'S IMPORTANT TO
HIM. IT IS A PRIORITY 12 AND 3
TO 2 TO GET THIS RIGHT AND THE
REMAINING TIME THAT HE HAS HERE
IN HIS SECOND TERM. HE AGAIN
WANTS TO REALLY THANK YOU FOR
YOUR CONTINUED SUPPORT. IT WILL
CONTINUE TO BE TOUGH. IT WILL
TAKE TIME. BUT WE ARE COMMITTED
AND AS THERE ARE MORE THE
OPENING REMARKS IS THAT WE'RE
ALL IN THIS TOGETHER
CONSTRUCTIVELY TOGETHER TO HELP
MAKE THE INSURANCE MARKETPLACE
WORK FOR ALL OF US AND BE
ACCESSIBLE FOR ALL OF US,
ESPECIALLY TO OUR MOST
VULNERABLE AND SO WITH THAT SAID
, I WANT TO THANK YOU VERY MUCH
FOR INVITING ME HERE TODAY AND
AT THE END OF THE DAY, PLEASE
KNOW THAT HE IS COMMITTED TO
PROTECTING CONSUMERS. AS WE WORK
TO ENSURE COMPETITIVE VOLUNTARY
INSURANCE MARKETPLACE IN OUR
STATE AND HOLD INSURANCE
INDUSTRY ACCOUNTABLE. THANK YOU.
THANK YOU SO MUCH. WE ARE SO
GRATEFUL THE CHIEF DEPUTY
COMMISSIONER MARTINEZ FOR BEING
HERE TODAY. THAT IS OUR AGENCY
PERSPECTIVE. NOW THAT WE LIKE
THAT WE HAVE HEARD FROM THE
DEPARTMENT INSURANCE WOULD LIKE
TO BE ABLE TO TAKE A DEEPER DIVE
IN HERE FROM THE NEAR
THEMSELVES. AND WE ARE SO
GRATEFUL THAT WE HAVE MISS
THROCKMORTON, WHO IS HERE TODAY
TO PROVIDE TESTIMONY TODAY.
WE'RE GRATEFUL. YOU HAVE
APPROXIMATELY FIVE MINUTES WE'LL
GIVE YOU 32ND HEADS UP. THE
FLOOR IS YOURS. THANK YOU. SO
MUCH FOR ATTENDING. THANK YOU SO
MUCH FOR HAVING ME. YOU SCOOPED
OUT A LITTLE CLOSER. IF YOU
DON'T MIND. THAT'S PERFECT.
THANK YOU. THANK YOU FOR HAVING
ME AND SO MUCH OF THAT REALLY
SOUNDS WONDERFUL. UM BUT MY NAME
IS SHATTERED THROCKMORTON IT AND
I'M HERE, TAKING A FULL DAY OFF
FROM HARVEST. I HOPE THAT
ILLUSTRATES CRITICAL INSURANCE
AVAILABILITY AND AFFORDABILITY
IS FOR WINERIES IN NORTHERN
CALIFORNIA. UM SO I'M THE
GENERAL MANAGER OF TO NAPA
VALLEY WINERIES, MY OWN RELIC
WINE CELLARS AND THEN ALSO
BARON'S FAMILY WINERY WHERE, AS
OF LAST WEDNESDAY, I HAVE WORKED
FOR 23 YEARS. UM I FEEL LIKE I
HAVE A LOT TO SAY ABOUT THIS. UM
BUT IN THESE ROLES, I'VE HAD THE
UNFORTUNATE EXPERIENCE OF BEING
DIRECTLY AFFECTED BY BOTH THE 17
AND 2020 FIRES. 17 FIRE. THE
ALICE FIRE BURNED THROUGH SODA
CANYON WHERE MY WINERY IS, UM,
AND SADLY, MOST OF OUR NEIGHBORS
BURNED TO THE GROUND. BUT RELICS
SURVIVED. OUR WINERY WAS VERY
THOUGHTFULLY AND INTENTIONALLY
CONSTRUCTED OUT OF STAINLESS
STEEL, CONCRETE AND A CAVE.
RESULTING INSURANCE CLAIM WAS
SMALL AS $50,000. IT WAS LESS
THAN IF WE'D HAD A TANK
LIABILITY ISSUE. UM MY HUSBAND
AND I STARTED RELIC WITH JUST
THREE BARRELS OF PIANO ARE AT A
FRIEND'S WINERY IN 2001. I
CANNOT OVERSTATE HOW MUCH WE
LOVE WINE. WE ARE WINE GEEKS TO
THE CORE WERE EXTREMELY
PASSIONATE ABOUT WHAT WE DO. WE
MAKE JUST 2500 CASES OF WINE,
SONOMA COAST, CHARDONNAY AND
PINOT AS WELL AS HERITAGE AND
BORDEAUX VARIETALS FROM NAPA. WE
DO. 120 YEAR OLD, DRY FARM
CARIGNANE AND ALL THESE CARBONE
AND THINGS THAT ARE JUST PIECES
OF NAPA VALLEY HISTORY. WE'RE
REALLY TRYING TO SUPPORT OLD
FARMERS AS WELL AS THE NEW
ECONOMY. IT TOOK US EIGHT YEARS
TO SCRIMP AND SAVE TO PURCHASE
OUR PROPERTY AND SODA CANYON.
AND EVEN THEN, THAT WAS ONLY
POSSIBLE BECAUSE OUR ECONOMY WAS
AT THE HEIGHT OF THE 2009
RECESSION. AND WE PURCHASED THE
CHEAPEST 10 ACRES WE COULD FIND
AFTER SIX YEARS OF PERMITTING
AND FINANCING AND CONSTRUCTION.
WE MOVED INTO OUR WINERY IN 2015
. WE HAVE NO INVESTORS. IT'S
JUST ME. MY HUSBAND AND OUR BANK
. UM WE LOVE OUR VALLEY, OUR
HOME, OUR FRIENDS, OUR INDUSTRY
AND EQUALLY IMPORTANTLY, THE
GUESTS WHO VISIT US FROM ALL
OVER THE WORLD WHO BECOME
FRIENDS. UM THE VALLEY IS LIKE
TRULY EXCEPTIONAL COMMUNITY BUT
TO THE TOPIC AT HAND. IN 2016
AND 2017, WHICH I'LL REFER TO AS
THE BEFORE TIMES. WE PAID 9 TO
$10,000 FOR FULL COVERAGE OF
PROPERTY AND WEINSTOCK. FROM
2018 TO 2021 AFTER THE 17TH FIRE
OUR RATES AND DOUBLED TO 19,000,
YET WE STILL HAD FULL COVERAGE
AND ADMITTED CARRIER THEN CAME
2022. NO ADMITTED CARRIERS WOULD
TOUCH US DESPITE BEING A PROVEN
LOW RISK. UM IN ORDER TO ENSURE
THE PROPERTY, WE COUPLE TOGETHER
A NUMBER OF DIFFERENT CARRIERS,
THE TOTAL COST JUMPED TO $52,000
. SO FIVE TIMES ARE BEFORE TIMES
RATES. SPEAKING FROM WHAT WAS
UNNECESSARY BUDGET HERBAL ITEM
ON OUR P AND L TO OUR FOURTH
LARGEST EXPENSE, SO GRAPES
MORTGAGE PAYROLL INSURANCE. IT'S
HUGE. AND I CAN'T STRESS THIS
ENOUGH. INSURANCE IS NOT AN
OPTION. IT IS ESSENTIAL. IT IS A
COVENANT OF OUR BANK ALONE. WE
CANNOT BE UNINSURED AND THESE
NEW POLICIES THEY DON'T EVEN
PROVIDE COVERAGE FOR WHAT WERE
CONSIDERED BASICS LIKE MOBILE
EQUIPMENT, PROPERTY AND TRANSIT.
WHEN LEAKAGE YOU COULDN'T BREAK
DOWN ALL THESE KINDS OF THINGS.
SO THIS YEAR IN ORDER TO KEEP
OUR RIGHTS FROM GOING EVEN
HIGHER, WE ASKED OUR BROKER TO
CUT ALL OF OUR PROPERTY VALUES
IN HALF, JUST TO GET BY WITH OUR
BANK. SO LIKE MANY SMALL
BUSINESS OWNERS, AND WE ARE ALL
IN THIS POSITION. AND YET
BECAUSE OF THE LOSS OF CARERS IN
CALIFORNIA, AND BECAUSE MY
BUSINESS IS IN A HIGH RISK AREA,
AND OTHER BUSINESS OWNERS ARE ON
THE BRINK. THE SITUATION IS
TRULY DIRE FOR US AND OTHER
SMALL WINERIES. IF SOMETHING
DOESN'T CHANGE, YOU'RE GOING TO
SEE PEOPLE GOING OUT OF
BUSINESS. THIS IS JUST NOT
SUSTAINABLE. PARENTS FAMILY
WINERY. IN ADDITION TO RUNNING
MY OWN WINERY, I AM THEIR
BUSINESS MANAGER. THAT PROPERTY
SUSTAINED SIGNIFICANT DAMAGE IN
THE 2020 FIRE. UM OUR RATES IN
THE BEFORE TIMES WERE AROUND
$22,000. HOWEVER AS CAN BE
EXPECTED, WE LOST OUR ALL OF OUR
COVERAGE FROM OUR CARRIER AS
SOON AS IT WAS LEGALLY POSSIBLE
FOR THEM TO DROP US. UM, AND OUR
RATES THERE JUMPED UP TO $87,000
A YEAR SO ALMOST FOUR TIMES THE
PREVIOUS COST $22,000 TO $87,000
A YEAR. THREE YEARS LATER. WE'RE
STILL NEGOTIATING A FINAL
SETTLEMENT WITHOUT INSURANCE
COMPANY, BUT WE WERE ABLE TO PAY
OFF OUR BANK LOAN WITH PROCEEDS
FROM THE INSURANCE CLAIM. AND SO
NOW WE ARE SELF INSURED. WHICH
LET ME BE CLEAR. SELF INSURED IS
JUST INDUSTRY SPEAK FOR SAYING
THAT WE DO NOT HAVE INSURANCE
OTHER THAN BASIC LIABILITY. THE
FAIR PLAN IS AN OPTION THAT MANY
WINERIES HAVE RESORTED TO, BUT
AT THREE TIMES THE COST FROM
THEIR EARLIER INSURANCE AS WELL,
AND THE COVERAGE BEING FAR BELOW
REPLACEMENT VALUES. IT'S JUST
REALLY NOT A SOLUTION. NOT TO
MENTION AS MANY OF US KNOW, WITH
SO MANY HOMEOWNERS AND
BUSINESSES NOW GOING INTO THAT
PLAN, ONE MAJOR CATASTROPHE WILL
MAKE THAT PLANT INSOLVENT. SO AS
THE VINTNER LEAD FOR THE NAPA
VALLEY VINTNERS OF OUR WILD FIRE
INSURANCE TASK FORCE. I'VE HEARD
DOZENS OF STORIES LIKE THIS.
SOME INCREASES HAVE BEEN TO 7 TO
8 TIMES. PREVIOUS RATES AND
LARGE WINERIES ARE NOT IMMUNE.
THE WINE INDUSTRY IS THE
ECONOMIC ENGINE OF OUR REGION,
PRODUCING 46,000 DIRECT AND
INDIRECT JOBS. THE THREAT POSED
BY THE INSURANCE AVAILABILITY.
CRISIS NOT ONLY AFFECTS ME AND
OTHER WINERIES BUT AFFECTS OUR
ENTIRE COMMUNITY. SO IN RESPONSE
AS A BOARD MEMBER OF THE NAPA
VALLEY VINTNERS AND CHAIR OF OUR
SIS COMMITTEE. FIRSTHAND
DEDICATED A LOT OF SEEN WATER
YOUR WINE COMMUNITIES DEDICATED
TO THIS, UM AFTER THE 2020 FIRES
. WE STARTED A WILDFIRE
PROTECTION PREVENTION COMMITTEE
WITH MORE THAN 77 REMEMBERS,
WHICH IS FOCUSED ON PROVIDING
INDUSTRY COMMUNITY RESOURCES TO
HARDEN STRUCTURES CREATE
DEFENSIBLE SPACE. BOLSTER LOCAL
POWER, FAIRNESS READINESS AND TO
ADVOCATE FOR INDIRECT RESOURCES
TO FUEL REDUCTION, MAINTENANCE
AND FIRE DETECTION MONITORING.
WORK HAS BEEN COLLABORATIVE AND
TIRELESS AND HAS RESULTED IN
MEANINGFUL WINDS THROUGH
SUBSTANTIAL FEDERAL GRANTS AND
MOST RECENTLY, WITH ADDITION OF
A NEW FIRE ADMINISTRATOR ROLE IN
NAPA COUNTY IN ADDITION TO ALL
OF THAT THE NEBULA VENDORS HAS
RAISED $2.1 MILLION LAST FALL,
WHICH WE DONATED TO NAPA, FIRE
WISE AND THE NAPA CONSERVATION
RESOURCE DISTRICT TO CREATE
MAINTAIN FIREBREAKS IN OUR HILLS
ABOUT 30 SECONDS. UM WE HAVE
JUST STARTED A FUNDRAISING
CAMPAIGN FOR THIS FALL. SO
PLEASE WISH US LUCK AND BETTER
YET FEEL FREE TO GO AND DONATE A
COLLECTIVE NAPA VALLEY. YOU CAN
EVEN WIN A PIZZA PARTY AT MY
WINERY, IF YOU WOULD LIKE, UM,
WE CREATED A NUMBER OF PUBLIC
PRIVATE PARTNERSHIPS WITH THE
COUNTY, LOCAL RESIDENTS AND FIRE
WISE. WE FEEL LIKE WE'VE DONE
EVERYTHING THAT WE CAN, BUT WE
REALLY NEED MORE PARTNERS.
PLEASE HELP US. WE CANNOT
SUSTAIN ANY MORE CURIOUS LEAVING
THE MARKET. WE NEED TO CREATE AN
ENVIRONMENT INCENTIVIZING THEM
TO STAY, ALLOWING A MINUTE
CARRIERS TO CHARGE HIGHER RATES
AS FAR BETTER THAN UNIMAGINATIVE
CARRIERS OF THE FAIR PLAN.
SENATOR DODD WAS KIND ENOUGH TO
COME TO OUR COMMUNITIES WELFARE
SUMMIT LAST WEEK AND PROVIDE
HISTORICAL CONTEXT AND EDUCATE
US ON PROP 103. I AM NOT AN
ACTUARY AND INSURANCE ADJUSTER,
BROKER OR LEGISLATOR. I DO NOT
HAVE ANSWERS. I JUST KNOW THAT
MY FAMILY, MY FRIENDS, MY
EMPLOYEES AND MY INDUSTRY NEEDS
HELP, AND I'M HERE TO ASK FOR IT
ON ALL THEIR BEHALF. SO THE FACT
THAT YOU HAVE ME HERE TODAY
GIVES ME HOPE AND I'M REALLY
GRATEFUL AND I REALLY HOPE WE
CAN WORK FORWARD TO FIND SOME
SOLUTIONS TO THIS. THANK YOU SO
MUCH. REALLY NICE JOB, MR MARK
MORTON. THANK YOU SO MUCH. AND
THE STATISTICS THAT YOU GAVE, UH
, TOLD THEM PAUL AND NOW BEING
THE FOURTH LARGEST EXPENSE. IT
IS AN EYE OPENER AND INCREDIBLY
SCARY, LONG TERM. IT IS NOT
SUSTAINABLE, VERY GRATEFUL.
WE'RE GOING TO BE HANGING WITH
US HERE BEFORE WE GO TO
QUESTIONS FROM THE COMMITTEE.
WE'RE GOING TO WELCOME MR
CAPONE. THANK YOU. SO MUCH.
MANAGING PARTNER MALLOY, AMERIAN
VASCO, NO INSURANCE SERVICES.
THEY DO COMMERCIAL INSURANCE,
FARM AND RANCH INSURANCE.
THEY'RE GOING TO BE GIVING US
THE PERSPECTIVE OF A FIRM, ONE
OF THE LEADING IN THE NORTH BETA
, WHO'S PROVIDING WORKING WITH
VINTNERS AND PROVIDING THAT TYPE
OF INSURANCE FOR COVERAGE AND
THE CHALLENGES THAT YOU'RE
SEEING. YOU HAVE FIVE MINUTES
WE'LL GIVE YOU 32ND HEADS UP.
WE'RE REALLY GRATEFUL YOU'RE
HERE TODAY. GOOD AFTERNOON.
PERFECT GOOD AFTERNOON. THANKS
FOR HAVING ME. UM I WOULD LIKE
TO SAY YOU KNOW, SCHATZI, THANKS
VERY MUCH FOR YOUR STORY.
EVERYTHING SHE SAID, IS
ABSOLUTELY ACCURATE. THE ONE
PART THAT SHE DIDN'T REALLY
EXPOUND UPON IS EVEN THOUGH THE
COST HAS INCREASED
ASTRONOMICALLY, THE COVERAGE HAS
ALSO GONE DOWN COMPARATIVELY AS
WELL. THE COVERAGE THAT WINERIES
CAN GET, REGARDLESS OF PRICE IS
A SHELL OF WHAT IT WAS JUST A
COUPLE OF YEARS AGO, AND IT
LEAVES MOST OF THE WINERIES MOST
CRITICAL. CAUSE OF LOSS,
CRITICAL RISK UNINSURED
REGARDLESS OF PREMIUM, SO THAT'S
SOMETHING TO ALSO BE NOTED. UM
I'D LIKE TO START MY REMARKS
WITH A EMAIL THAT I RECEIVED
FROM A FRIEND OF MINE THAT RUNS
ONE OF THE LARGEST WINERY
INSURANCE PROGRAMS IN THE STATE
OF CALIFORNIA, CERTAINLY IN THE
NAPA VALLEY AND SONOMA.
SURROUNDING AREAS. UM THIS IS A
CONVERSATION WE STARTED WITH ON
THE PHONE, BUT HE WAS EXPRESSING
THAT ESSENTIALLY SEE IF I CAN
GET THIS RIGHT. WE BOTH KNOW
THERE'S TREMENDOUS OPPORTUNITY
TO HELP INSURANCE SOLVE REAL
PROBLEMS. UNFORTUNATELY PROGRESS
AT THE DEUTSCHE IS ALMOST
IMPOSSIBLE. WE'VE PAID OVER $100
MILLION IN WILDFIRE LOSSES AND
STILL RETAIN $6 BILLION IN
PROPERTY VALUES. HOWEVER,
SOMEHOW WE'RE STILL THE BAD GUY.
SUCH A SHAME. GET INSURANCE
COMPANIES GETTING ANY SORT OF
PROGRESS APPROVED THROUGH THE
REGULATORY ENVIRONMENT IN THE
DEPARTMENT IS A REAL CHALLENGE
FOR THE INDUSTRY. UM IT'S
SOMETHING THAT IS JUST CURRENTLY
IMPOSSIBLE. UM FOR ENSURING FOR
WINERIES. TO ENSURE THEIR
EXPOSURES. THE FAIR PLAN IS NOT
IT'S INSURANCE. YOU KNOW IT DOES
PROVIDE COVERAGE. IT HELPS WITH
OUR LOANS THAT WE HAVE. UM BUT
IT DOES NOT PROVIDE COVERAGE FOR
THE RISK FOR WINE. IT DOES NOT
COVER YOUR TRANSPORTATION. IT
DOES NOT COVER LEAKAGE. IT DOES
NOT COVERED SPOILAGE CHANGE IN
TEMPERATURE, ALL THE THINGS THAT
ARE THE MOST IMPORTANT THING TO
THE BUSINESS OPERATION OF THE
WINERY. MOST OF OUR CLIENTS ARE
WELL PROTECTED AND DEFENDED
AGAINST WILDFIRE. MOST OF OUR
CLIENTS ARE NOT CONCERNED ABOUT
THE BUILDING BURNING. THEY'RE
CONCERNED ABOUT ALL THE OTHER
OPERATIONAL EXPOSURES THAT THEY
HAVE IN THEIR BUSINESS. UM I AM
THE MANAGING PARTNER OF MALLOY.
GRIEVOUS CONEY. I'M ALSO A
WINERY OWNER MYSELF. UM WE HAVE
A WINERY ON THE SILVERADO TRAIL.
IT I'M NOT AT ALL CONCERNED
ABOUT THE WILDFIRE EXPOSURE, BUT
I HAVE NO INSURANCE FOR ANY OF
THE INVENTORY IN MY WINERY
FACILITY. I'VE GOT A COUPLE
MILLION DOLLARS TO THE FAIR
PLAN. THAT'S GREAT, HOWEVER.
I'VE GOT $8 MILLION WORTH OF
WINE, PROBABLY $10 MILLION WORTH
OF WINE TODAY, GIVEN THAT WE'VE
JUST GONE THROUGH HARVEST
COMPLETELY UNINSURED IF THERE'S
SOMETHING THAT HAPPENS TO THAT
WINE, A LEAK A FAILURE OF OUR
COOLING SYSTEM THAT DAMAGES A
TANK OF WINE IT COULD BANKRUPT
US. NOT BECAUSE OF A WILDFIRE
EXPOSURE, BUT BECAUSE OF THE
OTHER OPERATIONAL EXPOSURES THAT
WE HAVE THAT JUST A COUPLE OF
YEARS AGO WERE ALMOST TO GIVE ME
IN THE INSURANCE INDUSTRY. THE
INSURANCE INDUSTRY IS VERY
COMFORTABLE UNDERWRITING THOSE
EXPOSURES IN PRICING
APPROPRIATELY FOR THEM. DEALING
WITH THE WILDFIRE EXPOSURE IS
SOMETHING THAT THEY JUST CAN'T
MITIGATE THE CATASTROPHIC NATURE
OF WILDFIRE. IS SOMETHING THAT
PRICING IS JUST NOT AVAILABLE,
UM, TO SPREAD THAT RISK AMONGST
ALL THE WINERIES, ALL OF
INSURANCE IN CALIFORNIA. IT'S
SOMETHING THAT WITHOUT TREATING
WILDFIRE SEPARATELY. I DON'T SEE
AS BEING SUSTAINABLE FOR THE
INSURANCE INSURANCE INDUSTRY
GOING FORWARD. UM SHE'S
ABSOLUTELY RIGHT. YOU KNOW,
WE'VE SEEN INCREASES IN PREMIUMS
HUNDREDS OF TIMES CLIENTS,
ENSURING THINGS FOR LARGE,
LARGER WINERY CLIENTS THAT WERE
ENSURING THEIR PROPERTY
EXPOSURES IN WILDFIRE RISK AREAS
FOR $50,000 A FEW YEARS AGO, ARE
NOW LOOKING AT HALF A MILLION
DOLLAR PREMIUMS. FOR BARELY
ENOUGH COVERAGE TO COVER THEIR
BANK LOANS NOT TO CONTINUE THEIR
OPERATION NOT TO REPLACE WHAT
THEY HAVE EXPOSED AND WHAT THEY
COULD ESSENTIALLY LOSE, BUT JUST
IN ORDER TO KEEP THEIR LOANS AND
KEEP THAT COVENANT WITH THEIR
BANK IT IS UNBELIEVABLY
SUBSTANTIAL. THE FAIR PLAN, YOU
KNOW, INCREASING THEIR LIMITS
SCARES ME. THE FARE PLAN HAS
PUBLICLY STATED THEIR
DISASTROUSLY UNDER RESERVED UM
AND PROBABLY WOULDN'T SURVIVE A
WIDE SCALE CATASTROPHE IN
MULTIPLE AREAS THROUGHOUT
CALIFORNIA. IF THE FAIR PLAN WAS
A STANDARD ADMITTED CARRIER THEY
WOULD BE SEIZED BY THE
DEPARTMENT OF INSURANCE THIS
AFTERNOON. UM I DON'T SEE THAT
IN INCREASING THE COVERAGE
PROVIDED BY THE FAIR PLAN SOLVES
THE PROBLEM. THE PLAN, ALSO IN
ORDER. TO OPERATE, YOU KNOW, HAS
A METHOD TO WHICH THEY WOULD
LEVY ADMITTED INSURANCE CARRIERS
IN CALIFORNIA IN THE EVENT OF AN
UNDERFUNDED LOSS. SO ANY
INSURANCE CARRIER THAT WRITES
INSURANCE IN CALIFORNIA IS
SUBJECT TO EXCESS LOSSES OVER
THE FAIR PLANS RESERVES IN THAT
EVENT. THAT'S SOMETHING THAT IS
DRIVING CARRIERS OUT OF THE
STATE AND REGARDLESS OF THE
OTHER CHANGES IN RISK RATING
THAT WE IMPLEMENT THAT LIABILITY
IS SOMETHING THAT IS NOT
SUSTAINABLE FOR THEM. UM,
THANKS. SO YOU KNOW, LOOKING AT
THE FAIR PLAN NATIONWIDE
INSURANCE, WHICH IS A YEAH, HUGE
NATIONAL INSURANCE CARRIER HAS A
VERY SIGNIFICANT PRESENCE HERE
IN CALIFORNIA. UM, EXCEPTIONALLY
SIGNIFICANT. THEY'RE THE NUMBER
ONE FIRE FARM UNDERWRITER FOR
FARMING THROUGHOUT THE STATE AS
WELL AS YOU KNOW, WINERIES AND
VINEYARDS. NATIONWIDE HAS MADE A
STATEMENT THAT THEY WANT TO
REDUCE THEIR EXPOSURE IN
CALIFORNIA FROM 10% OF THEIR
BOOK OF BUSINESS TO 5% THAT
MEANS CUTTING THEIR PRESENCE IN
CALIFORNIA AND HALF ACROSS ALL
SEGMENTS OF BUSINESS THAT THEY
WRITE. THAT IS VERY SUBSTANTIAL
AND SOMETHING THAT'S GOING TO
IMPACT THE INSURANCE INDUSTRY
YET AGAIN WITH ANOTHER ROUND OF
CANCELATIONS. FOR ALL SORTS OF
INSURANCE. NOT JUST, YOU KNOW,
WINERIES AND VINEYARDS. BUT VERY
SUBSTANTIAL IMPACT AND SOMETHING
THAT POINTS TO THE FACT THAT
CURRENTLY WITH THE WAY THAT
FIRES CURRENTLY INSURED IN THE
IN THE INSURANCE CODE IS NOT
SUSTAINABLE. I WOULD SUGGEST
THAT YOU KNOW, WE NEED TO LOOK
AT WILDFIRE INSURANCE
SPECIFICALLY. FOR THE
CATASTROPHIC EXPOSURE THAT IT
IS. THE INSURANCE INDUSTRY AND
THE FEDERAL GOVERNMENT. STATE
GOVERNMENTS, ETCETERA HAVE
SOLVED THESE PROBLEMS IN THE
PAST. YOU KNOW, EARTHQUAKE
INSURANCE IS A CATASTROPHIC RISK
EXPOSURE. FLOOD INSURANCE
TERRORISM INSURANCE, THE
NATIONAL CROP PROGRAM. THERE ARE
METHODS OUT THERE BY WHICH THESE
OTHER CATASTROPHIC EXPOSURES
HAVE BEEN DEALT WITH. AND I
THINK THAT IF WE DON'T LOOK AND
FOCUS ON WILDFIRE BEING A
SIMILAR CATASTROPHIC EXPOSURE,
THE INDUSTRY IS GOING TO
CONTINUE TO SHRINK AND CONTINUE
TO GO TO THAT NONSTANDARD
MARKET. WITH MANY INSURANCE
GOING UNINSURED. ABOUT ONE
MINUTE, SIR. UM. JUST I'D LIKE
TO CLOSE BY SAYING, YOU KNOW, IN
2018 WROTE NINE INSURANCE
POLICIES WITH THE FAIR PLAN. IN
2023 JUST BETWEEN JANUARY AND
MAY. WE'VE ADDED ANOTHER 253
POLICIES TO THE FAIR PLAN. THE
MOVE FROM THE ADMITTED MARKET TO
THE FAIR PLAN IS ALARMING IN OUR
SPACE AND FOR OUR CLIENT BASE.
THE NEXT WILDFIRE EVENT THAT WE
HAVE IS GOING TO BE DISASTROUS.
I WOULD EXPECT TO SEE MANY OF
OUR WINERIES IN THE VALLEY AS
WELL AS AROUND THE STATE. YOU
KNOW, THIS ISSUE IS CONSISTENT.
EVERYWHERE IN NAPA VALLEY,
SONOMA COUNTY, MENDOCINO COUNTY.
PASTOR ROBLE SAN LUIS OBISPO,
EATING THE FOOTHILLS. YOU NAME
THE AREA, THE IMPACT IN THE
EXPOSURE. THE PROBLEM IS EXACTLY
THE SAME. UM SO THAT'S ALL I
HAVE. THANKS GRABBED ME. THANK
YOU SO MUCH REALLY GRATEFUL INTO
THE THREE VIEW FOR BEING HERE.
WHAT WE'D LIKE TO DO IS OPEN IT
UP TO THE PANEL OF SENATORS WHO
ARE WITH US TODAY. QUESTIONS
COMMENTS, PLEASE, WHO WOULD LIKE
TO BE TO KICK HIS HAT FROM WHEN
WE START WITH MR CO CHAIR? YES,
MR MARTINEZ, UM FIRST OF ALL, I
APPRECIATE YOU BEING HERE TODAY.
I KNOW. THE DEPARTMENT OF
INSURANCE HAS A NUMBER OF RATE
REQUEST RATE INCREASE REQUEST
PENDING. I WANT TO KNOW WHAT THE
DEPARTMENT IS DOING TO PREPARE
FOR THE INCREASED WORKLOAD TO BE
EXPECTED FROM THE REGULATIONS
BEING PROMULGATED AS A RESULT OF
THE GOVERNOR'S EXECUTIVE ORDER.
IN HOW AND ALSO THE INSURANCE
COMMISSIONERS WORK THERE AND
ALSO AH! YOU KNOW, DO YOU BE, DO
YOU? DO YOU THINK YOU'RE GOING
TO BE ABLE TO TURN THOSE AROUND
IN A TIMELY MANNER? YES THANK
YOU. FOR THAT QUESTION, SENATOR
DODD AND OBVIOUSLY LIKE RUNNING
A LARGE ORGANIZATION. THERE'S
CERTAINLY A LOT OF THE EXTERNAL
RIGHT. THE PUBLIC POLICIES, THE
RULE MAKINGS. ALL OF THOSE ARE
SO INCREDIBLY IMPORTANT ON TOP
OF THE EXISTING WORK THAT THAT
WE HAVE AT THE DEPARTMENT AND SO
THAT YOUR YOUR YOUR QUESTION IS
ONE THAT ACTUALLY ALSO KEEPS ME
UP AT NIGHT OF ENSURING THAT WE
HAVE A PREPARED WORKFORCE AT THE
DEPARTMENT. LOOK DURING THE
PANDEMIC. WE ALL EMPLOYERS, WE
ALL SAW A TREMENDOUS RIGHT OF
INDIVIDUALS WHO HAD BEEN IN IN
THEIR POSITIONS HAVE BEEN IN
JOBS FOR YEARS. RETIRE WE SAW A
LOT OF A LOT OF INDIVIDUALS, AND
WE SAW IT IN MANY EMPLOYERS,
PUBLIC AND PRIVATE AND INCLUDING
ALSO THE DEPARTMENT OF INSURANCE
, SO WE DID HAVE A LOT A FAIR
AMOUNT OF TURNOVER THAT BEING
SAID. I HAVE BEEN IN WORKING
WITH MY PREDOMINANTLY THE RIGHT
REGULATION BRANCH, WHICH IS THE
BRANCH THAT RECEIVES ALL OF
THESE INSURER FILINGS. WE HAVE A
MULTIPRONGED APPROACH. FIRST. WE
DO WANT TO THANK THE LEGISLATURE
AND THE GOVERNOR. FIRST SIGNING
PASSING SIGNING BUDGET BILL JR.
WHICH WE DID HAVE BUDGET BILL
LANGUAGE IN THERE THAT ALLOWED
US TO THAT GIVES US STABILITY TO
CONTRACT OUT WITH FIRMS TO
ASSIST IN UM, THE REVIEW AND, UM
. APPROVAL OF PNC PROPERTY AND
CASUALTY FILING. SO THAT WAS
ONE. SECONDLY IS THAT THE
VACANCIES WITHIN THE RATE
REGULATION BRANCH I'VE BEEN LIKE
, UM, FILL THOSE VACANCIES. FILL
THEM UP. I DON'T WANT TO HAVE
ANY VACANCIES. FILL THOSE UP.
THIRDLY WE HAVE GONE OUT TO SEEK
AN ASSESSMENT BECAUSE, UH,
PROPER HAS BEEN A PROPOSITION
ONE OF THREE HAS BEEN AROUND FOR
QUITE SOMETIMES SEVERAL DECADES.
THE ANY ORGANIZATION SHOULD
CHANGE IN MOLD WITH THE TIMES
AND SO I WANT TO BE ABLE TO HAVE
A LOOK TO SEE WHAT HOW CAN WE
FURTHER RESTRUCTURE THE RATE
REGULATION BRANCH, SO IT IS
READY FOR THE FILINGS OF
TOMORROW? AND SO THAT IS
CURRENTLY UNDERWAY? WE'RE PAYING
FOR OVERTIME, WHICH IS VERY NEW
AT THE DEPARTMENT, BUT HAVE SAID
HEY, I WANT TO WE HAVE WE HAVE
MONEY. WE HAVE FUNDS TO PAY FOR
OVERTIME FOR THOSE INDIVIDUALS
THAT CAN AND WE DO ENTICE AND
WANT INDIVIDUALS WHO CAN WORK
MORE WORK LONGER TO PAY THEM
OVERTIME WERE ALSO HIRED A
RETURNING MUTANT FOR WHAT IT'S
WORTH TO ACTUALLY HELP WITH A
LOT OF THE HR PROCESSES BECAUSE
WE DO AS YOU ALL ARE PUBLIC
EMPLOYERS. WE DO HAVE A LOT OF
THE PROCESSES THAT WE NEED TO
STICK WITH, BUT THAT'S ANOTHER
ELEMENT THAT WE ARE ENSURING
THAT WE'RE ABLE TO STAFF AND
THEN ALSO AS PART OF THE
ASSESSMENT WE'RE ALSO EXPANDING
THE RATE REGULATIONS. SO WE'RE
ACTUALLY HAVING LITERALLY
LIFTING AND SHIFTING OTHER
VACANCIES IN OTHER PARTS OF THE
DEPARTMENT TO PUT THEM INTO THE
RIGHT REGULATION BRANCH. MORE
ACTUALLY IS MORE RATE ANALYSTS
IN ORDER TO AGAIN BE ABLE TO
STAFF UP EVEN MORE THAN WHAT WE
HAVE HAD FOR THE LAST COUPLE OF
DECADES, WHICH IT HAS BEEN VERY
STATIC IN A SENSE OF THE
WORKFORCE NUMBERS, SO HAVING ALL
OF THESE AGAIN, I KNOW A LOT
MORE INWARD FACING, BUT IT IS
IMPORTANT BECAUSE AS WE ARE
DOING ALL OF THESE PUBLIC
POLICIES AND PUSHING THESE
IMPORTANT REFORMS FORWARD. WE DO
NEED TO BE READY LIKE YESTERDAY
IN ORDER TO MAKE SURE THAT WE
HAVE THE STAFF BOTH BOTH IN
HOUSE AND CONTRACT TO BE ABLE TO
MAKE ALL THESE ADDITIONAL
FILINGS COMING IN AND THE MORE
COMPLEX FILINGS COMING IN AS
WELL, SO HOPEFULLY THAT HELPS
ANSWER YOUR QUESTION, SENATOR.
DON THAT ANSWERS IT. I HOPE
YOU'RE RIGHT AND HOPEFULLY IT
ALL WORKS BECAUSE IT'S AS WE
JUST HEARD FROM. YES MR CAPONE.
THAT'S JOB NUMBER ONE THAT WE
GOTTA HAVE. SO THANK YOU FOR
THAT. THE SECOND QUESTION I HAVE
FOR YOU IS, UM MAYBE NOT FAIR
FOR TODAY BECAUSE IT'S MAYBE A
LITTLE TOO PREMATURE, BUT I'M
WONDERING IF YOU OR YOUR TEAM
HAS LOOKED INTO WELL THE
REGULATORY PROCESS THAT YOU'RE
DOING RIGHT NOW, AND YOU'RE
WORKING TOWARDS IS AS ADVERTISED
ABOUT 30 DAYS AGO, WHICH I
SUPPORT WHOLEHEARTEDLY. WOULD.
LEGISLATIVE CODIFICATION, IF
THAT'S A WORD OF IF WE CODIFIED
THOSE REGULATIONS INTO
LEGISLATION. DOES THAT HELP THE
DEPARTMENT EITHER IN TIME. OR
ANYTHING TO PREVENT LAWSUITS.
I'M TRYING TO GET AN
UNDERSTANDING IF THAT IS
BENEFICIAL, OR IT'S PREMATURE AT
THIS TIME WAS ONE OF THE TWO
BECAUSE IF IT'S BENEFICIAL,
WE'VE GOT TO GET TO WORK. THANK
YOU, SENATOR DODD IN A WOULD
SAY, AND I DO APPRECIATE UM,
THIS PAST YEAR OF HAVING
CONVERSATIONS, AND CERTAINLY
BOTH HOUSES HAVE WORKING GROUPS
ON INSURANCE THAT THAT WE
ENGAGED WITH, AND I WOULD SAY,
UH, BUT AT THIS POINT MAY BE
PREMATURE IN A SENSE OF THE
STAGE THAT WE'RE IN RIGHT NOW.
BECAUSE WE DID MOVE FORWARD.
CERTAINLY ON THAT DAY AND
SEPTEMBER, UM AND THAT WHERE THE
COMMISSIONER PUBLICLY ANNOUNCES
HIS SUSTAINABLE INSURANCE
STRATEGY THAT THAT WAS BEING
ABLE TO LOOK AT ALL OF THE
EXISTING AUTHORITY THAT THE
COMMISSIONER HAS IN PARTNERSHIP
WITH THE GOVERNOR'S EXECUTIVE
ORDER AND THE GOVERNOR'S
ADMINISTRATION OF IMPRESSING
UPON THE EMERGENCY ELEMENT TO
IT, THAT WE WERE ABLE TO
PROMULGATE EMERGENCY REGULATIONS
TO GO THROUGH AGAIN. THIS IS
MORE THE BUT WITH THE OFFICE
ADMINISTRATIVE LAW, ETCETERA,
ETCETERA, AND SO WE DO BELIEVE
THAT WE HAVE A VERY ROBUST
EXISTING STATUTORY AUTHORITY TO
BE ABLE TO MOVE FORWARD WITH ALL
THAT WE NEED TO AND AS PART OF
THE REGULATORY PROCESS,
ABSOLUTELY. THERE ARE GOING TO
BE SEVERAL RULE MAKINGS THAT WE
WILL ENGAGE IN IN IN SEVERAL OF
THEM BEING IN EMERGENCY FORMAT
IN ORDER TO GET THE BALL
ROLLING, AND WE ARE HAVING VERY
WE ARE HAVING THOSE
CONVERSATIONS INTERNAL TO GET
READY SO THAT WE CAN RELEASE
THEM TO START THAT PROCESS. ONE
IN PARTICULAR THE CAP MODELING,
THE COMMISSIONER HAS HELD TWO
PUBLIC WORKSHOPS AND THEY'VE
BEEN VERY THE 1ST 1/1000
INDIVIDUALS WERE PRESENT
VIRTUALLY, BUT THAT AND SEVERAL
HAD TESTIFIED IN SO IT'S WE HAVE
. WE WANT TO MAKE SURE THAT WE
DO IT RIGHT. WE WANT TO BE SURE
THAT INDIVIDUALS THAT WANT TO BE
PART OF THE RULEMAKING
REGULATORY PROCESS ARE AND SO
THAT WILL TAKE SOME TIME. AND
THAT'S RIGHT. SO THAT OVERALL
HAS IT WILL TAKE SOME OF THAT
TIME. BUT THAT BEING SAID IS IT
IS FULL THRUSTERS. ALL OF THESE
LEVELS ARE BEING PULLED IN ORDER
TO GET THIS THE COMMERCIAL
INSURANCE AND HOMEOWNERS
INSURANCE MARKETPLACE BACK ON
TRACK. THANK YOU. GOOD THANK YOU
SO MUCH. MR CULTURE WERE IN TURN
OVER TO CENTER ALVARADO. GIL
THANK YOU. JUST QUICKLY HERE. I
WANT TO THANK ALL OF YOU FOR
BEING HERE AS WELL. AND MY
QUESTION IS FOR MISS
THROCKMORTON. I REALLY
APPRECIATE YOU BRINGING FORWARD
YOUR STORY AND HELPING PAINT THE
PICTURE OF JUST HOW DRASTIC
THESE INCREASES HAVE IMPACTED.
OUR FAMILY OWNED BUSINESSES IN
CALIFORNIA, AND PARTICULARLY
THOSE WHO LIKE YOU BROUGHT YOUR
DREAM OF OWNING A WINERY, NOT
FOR ANY SELFISH REASONS, BUT TO
CONTINUE TO GIVE US HIGH QUALITY
WINE IN CALIFORNIA. I HAVE SEEN
THE GAMUT OF WILDFIRES DEVASTATE
NORTHERN CALIFORNIA AND OUR
SIERRA FOOTHILLS. AND I KNOW MY
COLLEAGUES HAVE AS WELL. AND SO
BEING HERE TODAY IS OF UTMOST
IMPORTANT TO NOT ONLY TALK ABOUT
THE CRISIS, BUT WHAT NEXT AND TO
PUSH WITH URGENCY. ONE QUESTION
I HAVE FOR YOU IS AS THE LEADER
OF THE NAPA VALLEY VINTNERS ARE
THERE OPPORTUNITIES FOR OTHER
LEADERS, OTHER VINTNERS
ASSOCIATIONS TO COME TOGETHER
AROUND THIS ISSUE SO THAT THERE
IS A COLLECTIVE ACTION. THAT'S A
REALLY INTERESTING QUESTION. WE
ALREADY HAVE A COUPLE OF GROUPS
WORKING BETWEEN THE NAPOLI GRAPE
GROWERS THAT HAVE BELIEVE IT
NURTURES THE FARM BUREAU AND THE
WINE GROWERS. WE'VE BEEN MEETING
OVER THE LAST FEW MONTHS. TRY
OUT WAYS THAT WE CAN BETTER
PARTNER TOGETHER AND WORK ON A
NUMBER OF DIFFERENT ISSUES, AND
I AM NOT SURE THAT ANY OF US
ALONE THE WINNERS HAVE ALREADY
LIKE I SAID, RAISED $2.1 MILLION
, AND WE'RE DOING OTHER
FUNDRAISING CAMPAIGN THIS YEAR.
WE WENT TO DC LAST YEAR AND
LOBBYING EFFORTS AND WERE ABLE
TO GET PROMISES FOR $1.5 MILLION
FOR A FIREBREAK IN ANGWIN, AS
WELL AS $5 MILLION FOR SMOKE
RESEARCH. UM I MEAN, I FEEL LIKE
WE'RE ALMOST HITTING. WE'RE
HITTING A WALL. WE'RE DOING
EVERYTHING WE POSSIBLY CAN. WE
HAVE PUT MONEY AND EFFORTS
TOWARDS GETTING EVERYONE'S
PROPERTY HARDEN, AND NONE OF
THAT IS MAKING AN IOTA OF
DIFFERENCE IN OUR INSURANCE. AND
I'M TRULY NOT SURE WHAT ELSE WE
CAN DO EVEN POINT TOGETHER OVER
RESOURCES. THAT'S WHY I'M HERE.
YES IT'S LIKE YOU'RE DOING
EVERYTHING RIGHT AND STILL
CLIMBING AN UPHILL BATTLE. SO I
CAN DEFINITELY, UM SENSE THAT I
BECAUSE WE HAVE SO MANY VINTNERS
ASSOCIATIONS IN CALIFORNIA, A
AND NORTHERN CALIFORNIA
SPECIFICALLY CENTRAL VALLEY
WHERE WE HAVE THE ABILITY TO
BRING COLLECTIVE VOICE. I WILL
LOOK INTO OTHER WAYS THAT WE CAN
HELP SUPPORT THOSE THOSE
CONNECTIONS. THE BROADER BASE
SOLUTIONS. AND THEN THE OTHER
THING I JUST WANTED TO QUANTIFY
IS THE IMPACT NOT ONLY ON OUR
WINE REGION, BUT THOSE WHO
DEPEND ON THE ECONOMY OF THEIR
WINE REGION, OR HOTELS OR
RESTAURANTS ARE SMALL BUSINESSES
THAT BRING IN MILLIONS OF
VISITORS INTO CALIFORNIA. SO ALL
OF THAT IS IMPACTED WHEN OUR
WINERIES ARE NOT ABLE TO
FUNCTION AND MEET THAT BOTTOM
LINE, SO THIS IS A GREATER
ECONOMIC CRISIS. PER CALIFORNIA
AND I JUST WANT TO THANK YOU ALL
FOR BRINGING FORWARD THAT VOICE.
THAT'S GREAT. THANK YOU SO MUCH.
THANK YOU SO MUCH. SENATOR FOR
YOUR LEADERSHIP, JUST A FEW
ITEMS. IN AGAIN. ÓRDENES. WE ARE
SO GRATEFUL YOU'RE HERE AND I
KNOW PART OF THE COMMENTS ARE
DIRECTED AT YOU HERE TODAY IN
NOT BECAUSE OF BEING
CONFRONTATIONAL, BUT TRULY,
THESE ARE ISSUES THAT YOU'RE
WORKING THROUGH WITH THE
COMMISSIONER ON THE ISSUE OF
HARDENING. SO AS WE HEARD FROM
MRS THROCKMORTON ABOUT YOU HAVE,
UM. VINTNERS WHO ARE SPENDING
HUNDREDS OF $1000 ON HARDENING
THE PROPERTY PLUS LOOKING AT
ENHANCED VEGETATION MANAGEMENT
OF OUR FUEL BREAKS. AND THEN NOT
SEEN. CARRIERS EITHER GIVING A
CREDIT TOWARDS THAT. OFF OF COST
OF POLICY OR A MANDATORY, RIGHT
WRITING A POLICY AND I KNOW IN
THE IN PREVIOUS YEARS.
LEGISLATURE IS ATTEMPTED TO BE
ABLE TO DO A MANDATORY RIGHT OF
POLICY IF COMMUNITY HARDENING
PLANS. WERE ADOPTED JUST BEING
SUPER CANDID ABOUT IT. INSURANCE
INDUSTRY FOUGHT IT TOOTH AND
NAIL AND THOSE EFFORTS WERE
DEFEATED. UM YOUR THOUGHT ON
THAT BECAUSE I THINK MR
THROCKMORTON WHERE YOU HAVE
JOINTLY STATED, LITERALLY DOING
EVERYTHING THAT YOU CAN TO BE
ABLE TO MAKE YOUR PROPERTY. AH!
OR WILDFIRE SAFE, SAFER FOR
VISITORS AS WELL. AND YOU'RE NOT
SEEING A DIME BACK, MR MARTINEZ,
YOUR THOUGHT ON THAT AND AGAIN
KNOW THAT IT'S BEEN ATTEMPTED. I
KNOW THAT'S SOMETHING THAT
COMMISSIONER LAWYERS FOCUSED ON.
IN IF YOU WERE TO LOOK IN YOUR
CRYSTAL BALL IN THAT AND THEN
OTHER STATES HAVE BEEN FOCUSING
ON HÌ BURNING AS WELL IN
COMMUNITY HARDENING, PLEASE.
THANK YOU, SENATOR MCGUIRE FOR
THAT, AND I WOULD SAY, FIRST OF
ALL ON THE HARDENING AND THE
MITIGATION AND BEING LOCATED IN
A FIRE WISE COMMUNITY. THOSE ARE
ALL INCREDIBLY IMPORTANT THAT
MITIGATION IS KEY, AND ONE MAJOR
LEVEL IS IN PART OF THIS AS PART
OF THE OVERALL BRINGING THE
INSURANCE INDUSTRY. AH TO BE
MORE ROBUST AND COMPETITIVE HERE
IN THE STATE, AND ONE REASON WHY
THE COMMISSIONER HAD PROMULGATED
HIS ROOM MAKING IT TOOK THREE
YEARS BECAUSE THERE WAS PUSHBACK
. IT TOOK THREE YEARS TO GET THE
NATION'S FIRST MITIGATION
RECOGNITION RULEMAKING THROUGH
AND IT WAS FINALIZED LAST FALL.
AND TO SOME DEGREE, THIS MIGHT
BE SOME PART OF THE
IMPLEMENTATION AND EXECUTION
ELEMENT OF THIS RULEMAKING SINCE
IT WAS JUST JUST FINALIZED LATE
LAST FALL. WE GAVE ABOUT SIX
MONTHS IN ORDER FOR INSURANCE
COMPANIES TO FILE THEIR THEIR
MITIGATION FILING IN ORDER TO
ACHIEVE COMPLIANCE, SO WE
ACTUALLY DO HAVE MANY MITIGATION
FILINGS PENDING AT THE
DEPARTMENT UNDER REVIEW AND
APPROVAL, AND SO THOSE ARE
ACTIVELY AND WE ARE AS THEIR AS
THEIR COMMUNION OR AS WE'RE NOT
ME PER SE, BUT THE RATE
REGULATION STAFF ARE WORKING
INCREDIBLY HARD TO TURN THOSE
AROUND BECAUSE THAT DOES MEAN
WHERE THERE IS. THE RECOGNITION
AND INCENTIVE IZATION OF
PROPERTY OWNERS, BOTH HOMEOWNERS
AND COMMERCIAL THAT WOULD BE
ABLE TO PARTAKE OF THOSE
BENEFITS. SO I WOULD SAY THAT
THAT THERE IS SOME OF THE
IMPLEMENTATION ELEMENT HERE THAT
WE ARE HAVING. WE'VE HAD
INSURANCE COMPANIES HAVE FILED
AND WITH THEIR CURRENTLY IN REAL
TIME BEING REVIEWED TOWARDS
APPROVAL, AND THERE'S SOME THAT
ARE UM, WELL, THEY DON'T WANT TO
GET TO IN THE TECHNICALS, BUT
JUST HAVE BEEN BROUGHT IN ON
SOME BECAUSE THEY ARE QUITE
COMPLEX AND THEY GET WAY BEYOND
THE RULEMAKING. BUT BUT THAT
BEING SAID, AS WE WANT TO KEEP
THEM VERY, VERY CLEAN, VERY,
VERY QUICK IN ORDER TO REVIEW
AND GET THEM OUT, BECAUSE YES,
THAT DOES MEAN THEN THAT THAT
INSURANCE POLICYHOLDERS ARE
GOING TO BE RECOGNIZED THEY ARE
IT IS GOING TO GOING TO BE LAW
OF THE LAND. AND THEY WILL BE
PROVIDED DISCOUNTS ON TOP OF
THEIR PREMIUMS AND AGAIN THAT
WAS FOR BOTH HOMEOWNERS AND
COMMERCIAL OWNERS. AND AT FIRST,
THERE WAS TREMENDOUS PUSHBACK
FROM COMMERCIAL FROM THE
COMMERCIAL INSURANCE INDUSTRY TO
NOT ALLOW THAT ELEMENT, BUT WE
PUSHED BACK AND WE BELIEVED THAT
IT WAS GOING TO BE FOR
HOMEOWNERS AND FOR PROPERTY
OWNERS. FOR THE SECOND PART OF
YOUR QUESTION, THEN SENATOR
ABOUT THE MANDATORY RIGHT AND
RENEW THAT IS CERTAINLY BEEN A
LONG STANDING POLICY DEBATE FROM
AND BACK IN GRANTED AS A LITTLE
BIT OF A BLUR, BUT AT LEAST
THREE OR FOUR YEARS AGO, THE
COMMISSIONER HAS SPONSORED HIS
OWN MEASURE ALONG THOSE REGARDS,
SO IT IS SOMETHING THAT IS NOT
EVEN NEW TO HIM, AND, UM, IT DID
NOT MOVE FORWARD AND IN THE
PROCESS. AND HE FELT HE HAS HAD
SOME CHANCES LONG TIME TO THINK
ABOUT IT, AND HE FELT THAT THERE
WAS AN ELEMENT HERE OF AT LEAST
LOOKING BACK WHEN WE HAD
COMPELLED THE INSURANCE INDUSTRY
TO WRITE EARTHQUAKES, AND WE HAD
THAT THAT ISSUE OF HOMEOWNERS
INSURANCE COMPANIES LEAVING THE
STATE OR THREATENING TO LEAVE
THE STATE AND WE HAD AN
INCREDIBLY AH, IT WAS A VERY
CHALLENGING TIME BACK THEN, WHEN
WE HAD THE NORTHRIDGE
EARTHQUAKE, AND SO FROM THERE
AND FOURTH, THE CALIFORNIA
EARTHQUAKE AUTHORITY SPRUNG
FORTH AND SO HE WAS JUST GOING
TO SAY ON THAT ISSUE, AND I KNOW
MR CAPONE E. YOU BROUGHT THIS UP
AS WELL AS BREAKING OUT WILDFIRE
AND I'M GOING TO TURN IT RIGHT
BACK. READY MR MARTINEZ. I DON'T
MEAN TO INTERRUPT, BUT I THINK
THE CHALLENGE ON EARTHQUAKE IS
THE VAST IT IS A SMALL MINORITY
OF HOMEOWNERS THAT ACTUALLY
PURCHASED EARTHQUAKE INSURANCE
IN THIS STATE JUST BECAUSE OF
THE SIGNIFICANT COSTS. I THINK
IF WE TAKE A LOOK AT RIO DELL,
FOR EXAMPLE OF A SMALL SNAPSHOT
WHERE WE HAD THAT 6.0 THERE AH,
ON CHRISTMAS EVE. IT. JUST I
THINK 3% OF HOMES. I MEAN, SO
MINOR IN REGARD TO WHO'S
PURCHASING. THAT WOULD BE MY
CONCERN IF WE IF WE WERE TO
BREAK OUT WILDFIRE, RIGHT? LIKE
WHAT WE DO WITH EARTHQUAKE THAT
COSTS ARE GOING TO BE
PROHIBITIVE. PROHIBITIVE TO
ACTUAL PURCHASE AND TAKE UP IF
WE USE THAT, AS AN EXAMPLE, IT
WOULD BE CONCERNED ABOUT THAT. I
GUESS MY ITEM IS THAT AND AGAIN
I WANT TO SAY THANK YOU TO
COMMISSIONER LARA BECAUSE HE DID
ADVANCE THAT BILL. IT WAS I
DON'T THINK HE EVEN GOT A
HEARING AND INSURANCE OVER ON
THE ASSEMBLY SIDE AND THIS IS
MANY YEARS AGO, AND THIS IS AN
ISSUE THAT HE WAS VERY FOCUSED
ON AND VERY GRATEFUL FOR THAT. I
THINK YOU KNOW WHAT A LOT OF
FOLKS ARE ASKING IS. ARE WE EVER
GOING TO GET BACK TO WHERE WE
WERE RIGHT? UM AND EVEN THOUGH I
THINK WE'VE GONE FROM ABOUT
1.424% TOTAL POLICY IN THE
AIRPLANE SOMEWHERE RIGHT IN
THERE, RIGHT THAT THE TYPE OF
INDUSTRIES THAT HAVE IMPACTED
OUR LIGHT OUR WINE WHERE IT IS
MUCH GREATER THAN THOSE
PERCENTAGES SHOW STATEWIDE. AND
I THINK YOU KNOW, LOOKING AT
THAT HOLISTIC APPROACH. WHETHER
IT'S ADDITIONAL CREDIT FOR
HARDENING RIGHT OR LOOKING AT
MANDATORY RIGHT IF WE LOOK AT
COMMUNITY HARDENING PLANS,
ETCETERA TO TRY TO BE ABLE TO
GET US BACK TO SOME TYPE OF
SEMBLANCE OF WHAT IT ONCE WAS.
YOUR THOUGHTS ON THAT. AND THEN
MR CAPONE E WILL LOOK TO YOU TO
JUMP IN ON THIS AS WELL. YEAH I
WOULD SAY THAT GIVEN THE WHEN,
WHEN THE COMMISSIONER HIT
SPONSORED THAT THAT THAT
MEASURES SEVERAL YEARS AGO, HE
PUT A LOT OF THOUGHT TO IT AND
CONTINUE TO WITH A LOT OF THE
TOWN HALLS AND UP AND DOWN
CONVERSATIONS HE'S HAD WITH WITH
WITH STAKEHOLDERS THAT
ULTIMATELY HE'S GONE DOWN THE
PATH OF NOW, UM OF RELEASING OR
OR CREATING HIS SUSTAINABLE
INSURANCE STRATEGY OF FILLING.
THAT WAS THAT IS GOING TO BE THE
BEST WAY FOR HIM TO BE ABLE TO
PROVIDE THE CHANGE IN THE
IMPORTANT WAY TO. TO GET THE
INSURANCE INDUSTRY IN
MARKETPLACE BACK TO BE MORE
VIABLE AND COMPETITIVE. AND SO
HE HAS MOVED LESS TOWARDS THE
MANDATORY ELEMENT, BUT MORE
TOWARDS OKAY. THERE IS BECAUSE
THERE IS ACTUALLY IN THE
SUSTAINABLE INSURANCE. I KNOW WE
CAN GET TOO FAR INTO THE DETAILS
OF IT. YET THERE IS A MANDATORY
ELEMENT TO IT IS THAT WE LOOKED
AT OKAY. THE INSURANCE MARKET
HAS BEEN SAYING WE WANT TO BE
ABLE TO USE FOR EXAMPLE, CAP
MODELING AND INCORPORATE NET
COSTS OF REINSURANCE, AND IF
THERE IS SOME ELEMENT OF
PROVIDING THOSE TOOLS IN THEIR
RATE FILING OF AN INSURANCE
COMPANY, WHETHER HOMEOWNERS AND
OR COMMERCIAL WANTS BABY UTILIZE
ONE OR BOTH OF THOSE TOOLS THEN
BY OPTING INTO THAT, THEN THEY
WOULD BE COMPELLED TO WRITE AT
LEAST 85% OF THEIR MARKET SHARE
AND THE DISTRESSED AREAS OF THE
STATE. SO THAT WAS THE BALANCE
THAT HE STRUCK IN FEELING. OKAY
HE STILL FEELS THE BENEFIT OF
HAVING SOME ELEMENT SOME ELEMENT
OF A MANDATORY YET IT NEEDS TO
BE SOMETHING WHERE THERE. HE
FELT THAT WELL, UM, MANDATORY
ELEMENT IN THAT REGARD OF THE
OPTING IN FROM AN INSURANCE
COMPANY SAY YES, WE WANT TO BE
ABLE TO UTILIZE CAP MODEL
REINSURANCE AND SEVERAL MEMBERS
ARE MANY OF YOU AND SOME OF YOUR
COLLEAGUES HERE IN THE
LEGISLATURE. WE HAVE TALKED
ABOUT THOSE TOOLS. THERE'S BEEN
SEVERAL HEARINGS INFORMATIONAL
HEARINGS ON THOSE TWO ELEMENTS
FOR THE PAST SEVERAL YEARS. AND
SO. IT'S SOMETHING WHERE THE
COMMISSIONER COMMISSIONER LADA
IS, IS ABSOLUTELY AGAIN. VERY
VERY OPEN. IT'S THOSE ARE TWO
ELEMENTS AS PART OF THE MULTI
STRONG MULTIPRONGED STRATEGY
THAT HE ANNOUNCED NOT TOO LONG
AGO THAT AGAIN IN ALLOWING AN
INSURANCE COMPANY IF THEY SO
CHOOSE TO, THEN THERE WOULD BE
COMPELLED TO AND WE WOULD HAVE
THE AT THE NEGOTIATING TABLE
UNDER PROPER UNDER 3103. UNDER
THE COMMISSIONER'S EXISTING
AUTHORITY TO COMPEL THAT
INSURANCE COMPANIES SO THAT WE
WOULD MAKE SURE THAT AGAIN IF
THEY USE THE WONDER BOTH OF
THOSE TOOLS THAT WE'D BE ABLE TO
BRING THEM BACK IF THEY DO NOT,
UH, IF THEY FALL SHORT OF THAT
85% PLUS COMMITMENT TO RIGHT?
YEAH NO, ABSOLUTELY. AND I THINK
THAT THE ISSUE THAT YEAH. IN
SENATOR, DOCTOR SAID. IT MAKES
SENSE AND I THINK THE ONE ITEM
IS JUST WHERE THAT JUST BEING
HONEST TO WHERE THAT 15% LIES.
AND I THINK THE CONCERN IS
RESPECT. DISTRICT ONE. THERE YOU
GO. EXACTLY BUT AND ESPECIALLY
THOSE HARD HIT INDUSTRIES WHERE
WE'VE SEEN FIRE AFTER FIRE OF
THE FIRE AGAIN. THIS IS NOT EASY
, AND I JUST WANT TO SAY THANK
YOU TO THE DEPUTY COMMISSIONER,
CHIEF DEPUTY COMMISSIONER IN THE
COMMISSIONER FOR THE WORK ON
THIS OF WORKING WITH ALL SIDES
TO BE ABLE TO GET SHOW PROGRESS
FOR CALIFORNIA CONSUMERS, AND
THAT'S SOMETHING EVEN WORKING ON
MR COMPANY AND WANT TO TURN OVER
TO YOU BECAUSE I KNOW YOU
PRACTICED UP TO BETTER HAVE SOME
SKIN IN THIS GAME, PLEASE.
THANKS AGAIN, SO I MEAN, I SEE
TWO PROBLEMS, ONE WITH
COMPELLING INSURANCE COMPANIES
AND MANDATORY YOU MUST WRITE
SCENARIO ULTIMATUM ON THOSE
CARRIERS. FURTHER GOING TO FORCE
THOSE CARRIERS OUT OF THE STATE.
IT PUTS THEM IN A POSITION THAT
I JUST DON'T THINK IT'S
SUSTAINABLE WHEN YOU'RE FORCING
THEM TO ENSURE THESE WILDFIRE
RISK. UM GOING FORWARD WITH THE
CURRENT WAY THAT THE POLICIES
ARE WRITTEN, AND THE INSURANCE
CODE DEFINES FIRE. UM WHAT
SHOTS, HE SAID ABOUT ENSURING
HER VALUES FOR HALF OF THEIR
INSURABLE VALUE. YOU KNOW, ONE
THING THAT WE'VE SEEN INSURANCE
SOCIETY IS TREMENDOUS INFLATION,
PRIMARILY IN THE IN THE PROPERTY
AND CONSTRUCTION INDUSTRIES,
MAYBE OUTPACING, YOU KNOW WHAT
WE'VE SEEN NATIONALLY, UM, IN
2017 AFTER THE YOU KNOW FIRES IN
2017. I WOULD TELL PEOPLE THAT
CONTRACTORS IN OUR AREA DIDN'T
GET OUT OF BED. ON MONDAY
MORNING FOR THE SAME MONEY THAT
THEY GLADLY WENT TO WORK FOR
FRIDAY AFTERNOON. UM, THAT
PROBLEM HAS CONTINUED, THERE'S
BEEN CHANGES TO BUILDING CODES
WHICH HAVE DRIVEN THE REPAIR
REPLACEMENT COSTS SIGNIFICANTLY
FOR GOOD REASON. BUT IT'S FACTOR
DRIVING THE VALUATIONS THAT
THESE INSURANCE CARRIERS FACE
WHEN DEALING WITH A WILDFIRE
LOSS. YOU KNOW IF YOU HAD A
BILLION DOLLAR WILDFIRE LOST TWO
YEARS AGO AND COUNT THAT AS A $2
BILLION WILDFIRE LOSS THIS YEAR,
UM SO THERE'S OTHER FACTORS THAT
ARE DRIVING AT THIS THAT I JUST
DON'T THINK LEAD TO A
SUSTAINABLE MARKET. MY COMMENTS
ON YOU KNOW THE EARTHQUAKE
EXPOSURE. I THINK YOU KNOW, TO
TAKE THAT A LITTLE BIT FURTHER.
YEAH NOT AS MANY PEOPLE BY
EARTHQUAKE INSURANCE THAT'S
KNOWN, BUT IT ALLOWS CARRIERS TO
ISSUE DIFFERENT TERMS FOR THAT
PARTICULAR COVERAGE. THINKING
MORE ABOUT WILDFIRE, A DIFFERENT
DEDUCTIBLE FOR WILDFIRES, SO IF
WE'RE ALLOWED TO KEEP IT WITHIN
THE STANDARD POLICY, BUT HAVE A
DIFFERENT DEDUCTIBLE. HAVE A
DIFFERENT DEDUCTIBLE FOR SMOKE
CONTAMINATION FOR LOSS OF USE
FOR BUSINESS INCOME. THAT'S
WHAT'S REALLY HARMING INSURANCE
CARRIERS. THE WILDFIRE LOSSES
ARE SIGNIFICANT. BUT THE DEATH
BY 1000 CUTS. LOSSES ARE ALSO
IMPACTING THE INDUSTRY AND
AFFECTING THE WAY THAT THEY LOOK
AT THIS. THAT'S WHY THEY DON'T
WANT TO ENSURE ANYTHING. THAT'S
WITHIN A MILE OF ANY HIGH HAZARD
WILDFIRE AREA IS BECAUSE EVEN IF
THEY'RE NOT WORRIED ABOUT THE
WILDFIRE ITSELF, IF IMPACTING
THE PROPERTY, THEY'RE WORRIED
ABOUT THE LOSS OF USE THE
BUSINESS INCOME TO SMOKE
CONTAMINATION AND ALL THESE
OTHER THINGS THAT WE ALL KNOW
HOW TO DEAL WITH, AND WE WILL
DEAL WITH THEM APPROPRIATELY,
BUT WHEN YOU TURN THEM OVER TO
THE INSURANCE CARRIER WE'RE
TALKING SIX FIGURE LOSSES FOR
PROPERTY THAT WAS NOT TOUCHED BY
THE FIRE. IT'S SOMETHING THAT I
THINK THAT WE NEED TO LOOK AT
DOING A LITTLE BIT DIFFERENTLY.
GIVING INSURANCE CARRIERS A
LITTLE BIT OF BREATHING ROOM ON
HOW THAT'S HANDLED, SO THAT THEN
THEY CAN COME BACK STRONGLY TO
THE MARKET AND PROVIDE RATES
MORE COMPARABLE TO WHERE WE
WERE. DO I SEE IT GOING BACK TO
THE WAY IT WAS NO CHANCE. YEAH
AND I THINK THAT THE ONLY OTHER
COUNTERPOINT IS THAT THERE ARE
SOME STATES IN THE SOUTHEAST
FLORIDA, FOR EXAMPLE, GIVEN I AM
INSURANCE COMPANIES. HUGE
INCREASES, RIGHT AND AGGRESSIVE
REINSURANCE GOING FROM PUBLIC TO
PRIVATE, CATASTROPHIC MODELING
SYSTEM. AND THEY STILL PULLED
OUT 17 OUT OF FLORIDA MUCH
HIGHER RATES. THIS IS ON
RESIDENTIAL SITE, MUCH HIGHER
RATES THAN WHITE CALIFORNIA HAS
SO I, I GUESS LOOK AGAIN. THIS
IS ONE OF THE MOST COMPLICATED
SUBJECTS THAT ARE FACING OUR
ECONOMY FACING HOMEOWNERS,
BUSINESS OWNERS RIGHT THERE HAS
TO BE SOMETHING IN THE MIDDLE.
WHERE WE SIMPLY DON'T GIVE AWAY
THE STORE TO INSURANCE
CORPORATIONS LIKE WHAT SOME
STATES HAVE DONE BECAUSE EVEN
WITH THE HIGHEST RATES IN THE
NATION, INSURANCE COMPANIES ARE
LEAVING TOWN. AND LEAVING THE
ENTIRE STATE. SO I THINK THAT
I'M TRYING TO BE ABLE TO FIGURE
OUT WHERE THERE IS THAT LANDING
SPOT HERE YOU IN REGARDS TO
DECOUPLING RIGHT IN TRYING TO
FIGURE OUT HOW TO FUND THAT
RIGHT, MR. CAPONE E. I DON'T
WANT TO PUT WORDS INTO YOUR
MOUTH. BUT LOOKING AT WHAT THAT
POTENTIAL FINANCIAL MODEL COULD
LOOK LIKE. YEAH THAT'S A EXACTLY
WHAT I'M SUGGESTING IF THERE'S
SOME WAY TO DECOUPLE THAT FROM
THE STANDARD FIRE POLICY. AND
HOW THE TERM FIRE IS USED AND
CREATE A PARALLEL TERM OF
WILDFIRE. SPECIFICALLY I THINK
THAT GIVES US THE BREATHING ROOM
TO THEN LOOK AT IT DIFFERENTLY,
WHETHER THERE IS A CALIFORNIA
WILDFIRE FUND OR AUTHORITY OR OR
, YOU KNOW, IT'S STANDALONE
MARKET THAT'S DEVELOPED FOR
THAT. YOU KNOW SOMETHING THAT'S
FACT STOPPED BY THE STATE
SOMEHOW. THE FEDERAL TERRORISM
INSURANCE PROGRAMS BACK STOPPED
BY THE FEDERAL GOVERNMENT IT
ALLOWS. YOU KNOW INSURANCE
CARRIERS TO CONTINUE TO PROVIDE
THAT COVERAGE AND MOST PEOPLE IN
AT RISK AREAS OR MOST PEOPLE
THAT ARE NOT EXPOSED TO
TERRORISM OR DON'T BELIEVE THAT
THEY ARE NOT PURCHASE THE
COVERAGE, WHICH YOU KNOW, ALLOWS
THE MARKET TO DO WHAT IT NEEDS
TO DO. UM, BUT I THINK UNTIL WE
THINK ABOUT IT DIFFERENTLY,
WE'RE STILL GOING TO BE GOING IN
THE SAME DIRECTION AND NOT
IMPACTING OUR POLICYHOLDERS
THROUGHOUT THE STATE IN A
POSITIVE WAY. APPRECIATE IT.
THANK YOU SO MUCH. MR WE'RE
GOING TO GO TO MR MARTIN FOR ANY
ANY CLOSING COMMENTS, PLEASE,
MA'AM. FLOOR IS YOURS FOR JUST A
COUPLE OF MINUTES. I JUST WANTED
TO ASK SO AS I SAID TERRORISM,
AN EARTHQUAKE IS EXTREMELY
EXPENSIVE. IF YOU WANT TO DIRECT
A QUESTION OF THE COMMITTEE, AND
THEN WE'LL PULL WILDFIRE
INSURANCE OUT. WOULD THEY THEN
TAKE MITIGATION MEASURES INTO
ACCOUNT LIKE WOULD IT WOULD
RELIC HAVE CATASTROPHIC COST
WHEN WE? WE'VE SURVIVED AN
EARTHQUAKE AND A FIRE WITH
ALMOST NO CLAIM THAT WE HAVE THE
SAME EXPONENTIAL COSTS FOR THAT
COVERAGE AS A SOMEBODY WHO HAS
DONE NO HARDENING, AND I THINK
THE OTHER PIECES ON RISK
MODELING RIGHT IF MR BARNEY
DON'T WANT TO PUT WORDS IN YOUR
MOUTH AGAIN, BUT I THINK IF YOU
TAKE A LOOK AT SILVERADO TRAIL,
FOR EXAMPLE, A LOT OF THESE
WINERIES ARE IN THE MIDDLE OF A
FLIP IN VINEYARD. WITH ACRES
UPON ACRES OF GREEN SPACE
BETWEEN THEM. AND WHERE THAT
WILD AND INTERFACE MAYBE RIGHT.
AND THE REASON WHY I BRING THAT
UP IS IF YOU'RE LOOKING AT
HARDENING OF A PROPERTY. PLUS,
YOU'RE ABLE TO PROVE THAT YOU
HAVE THAT BUFFER. IN ADDITION TO
MITIGATION, THAT'S THE GENOCIDE
OF THE VINEYARDS ON THE HILL.
THERE SHOULD BE SOME ABILITY
DEPARTMENT INSURANCE HAS BEEN
WORKING ON THOSE RAGS RIGHT NOW.
AND THOSE REGULATIONS PROVIDE
CREDIT TO BE ABLE TO PROVIDE
CREDIT FOR THAT, BUT IT WOULD BE
AN ACTUAL BREAK OUT OF A
SEPARATE POLICIES. WHAT YOU'RE
TALKING ABOUT, MR MCBURNEY. YEAH
AGAIN, WHETHER IT'S A SEPARATE
POLICY OR JUST DEFINED AS A
SEPARATE PERIL WITHIN THE POLICY
, IT GIVES CARRIERS THE ABILITY
TO RATE AGAINST THAT SEPARATELY,
DIFFERENT DEDUCTIBLES, DIFFERENT
COVERAGE LIMITS. AND SO I THINK
THAT IT ALSO SEPARATE
UNDERWRITING RIGHT NOW, THE
CARRIERS CAN ONLY UNDERWRITE THE
ACCOUNT AS A WHOLE AND FIRE AS
ONE PARTICULAR RISK, SO WHETHER
IT'S A KITCHEN FIRE OR WILDFIRE,
IT'S THE SAME UNDERWRITING RISK.
SEPARATING THOSE TWO WOULD ALLOW
THEM TO RATE AND UNDERWRITE THAT
DIFFERENTLY AND THEN PROVIDE
BENEFITS AND CREDITS BASED ON
THE MITIGATION THAT'S BEEN DONE
IN THE HARDENING OR THE LACK
THEREOF. SO I JUST DON'T THINK
CAN CONTINUING TO KEEP IT AS ONE
PERIL BENEFITS THE INDUSTRY? THE
INSURERS, YOU KNOW EVERYTHING
THAT WE'RE TRYING TO DO. THANK
YOU FOR THAT. VERY, VERY
GRATEFUL. FINAL WORD, MR
MARTINEZ, MEANING THAT YOU WOULD
LIKE TO BETTER CLEAN UP ON IN
REGARD TO ANY COMMENTS, PLEASE,
MR MARTINEZ, THAT WE'RE GOING TO
TRANSITION TO OUR NEXT PANEL, MR
MARTINEZ. THANK YOU, SIR. THANK
YOU JUST WANTED TO THANK YOU ALL
AND REALLY JUST FOR HAVING THIS
HEARING FOR BEFORE REACHING OUT,
AND WE I KNOW OUR COMMUNITY
RELATIONS AND OUTREACH BRANCH IN
PARTICULAR AND CONSUMER SERVICES
. WE PARTNER A LOT WITH YOUR
DISTRICT OFFICES FOR TOWN HALLS
TO SHARE INFORMATION, BUT IN
TOTAL JUST KNOW THAT WE CONTINUE
TO WANT TO BE PARTNERS WITH YOU
ALL HELP ANSWER QUESTIONS,
CONSTITUENTS. WHY IS AS WELL AS
WITH ON POLICY, I WOULD SAY JUST
WHEN JUST A COUPLE OF LINES ON
THE FLORIDIAN EXAMPLE WE DO
AGREE THAT THE UM POLICYMAKERS
IN THE STATE OF FLORIDA DID GIVE
A LOT OUT, AND WE CERTAINLY
LOOKED AT THAT AS A SOMETHING TO
AS A AS AN EXAMPLE OF NOT OF
WHAT NOT TO DO AND TOTAL THAT WE
FELT THAT AND THAT'S WHY WE FELT
THAT ONE ELEMENT OF HAVING THE
MANDATORY ELEMENT OF THE 85% OF
THAT LEAST 85% IN THE
SUSTAINABLE INSURANCE STRATEGY
BECAUSE THERE IS NO COMPELLING
THE INSURANCE INDUSTRY TO WRITE
IN FLORIDA WHEN THEY DID THAT
THEY HAD NOTHING. THEY SAID.
HERE HERE, HERE, HERE, HERE
HERE, ALL THEY GIVE ME BUT THERE
WAS WE WOULD ARGUE THAT THAT
THERE WAS NOT MUCH FOR CONSUMERS
TO POINT TO THAT. BUT HERE IN
CALIFORNIA AND AS AN EXAMPLE TO
BE OKAY AS WE ARE AT THE
NEGOTIATING TABLE AS WE'RE
CREATING A SUSTAINABLE INSURANCE
STRATEGY THAT THERE ACTUALLY IS
A AGAIN HAVING THAT MANDATORY
ELEMENT, IF WHEN AN INSURANCE
COMPANY WANTED YOU, LIKE UTILIZE
SOME OF THE MORE CLIMATE CHANGE
TOOLS THAT THAT THAT ARE
IMPORTANT TO LOOK AT, SO I WOULD
SAY THAT IS ONE THING I WANTED
TO ADD, BUT WITH THAT SAID,
THANK YOU FOR INVITING ME AND
LOOK FORWARD TO CHATTING WITH
YOU FURTHER. THANK YOU SO MUCH.
CHIEF DEPUTY COMMISSIONER. THANK
YOU SO MUCH FOR THROCKMORTON.
WONDERFUL TO SEE YOU. THANK YOU
FOR TAKING TIME OUT OF YOUR
INCREDIBLY BUSY SCHEDULE, NOT
SINCERELY DEBATE TO BE HERE WITH
US. IT MEANS SO MUCH, MR CAPONE.
THANK YOU SO MUCH FOR YOUR
PERSPECTIVE. WE'RE GOING TO BE
FOLLOWING UP ON THIS. OBVIOUSLY
THIS YEAR IS THIS IS GOING TO BE
A PRIORITY FOR SENATE PRIORITY.
I BELIEVE FOR THE ASSEMBLY IN WE
LOOK FORWARD TO OUR CONTINUED
DIALOGUE AND PART WORSHIP HERE
IN THE WEEKS AND MONTHS TO COME
WITH THAT. I'M GOING TO TURN IT
OVER TO MR CO CHAIR TO TALK
ABOUT THE BOTTLE BILL AND OUR
NEXT PANEL. THANK YOU SO MUCH,
MR OUTSIDE. AREN'T YOU ALSO A
FIREMAN TOO? YOU GOT IT ALL
GOING AND UP THERE? YEAH. SO
LISTEN, I REALLY APPRECIATE MR
MARTINEZ. MR THROCKMORTON. AND
MR CAPONE E THANK YOU VERY MUCH
FOR TAKING THE TIME TO BE HERE.
SENATOR MCGUIRE. THANK YOU FOR
LEADING THAT PANEL. WE
APPRECIATE IT VERY MUCH. TAKE
CARE. OKAY. TODAY'S SECOND
PANELS ABOUT THE BOTTLE BILL AND
ITS IMPACT ON THE CALIFORNIA
WINE INDUSTRY. I AM FORTUNATE TO
REPRESENT AN AREA OF OUR STATE
THAT PRODUCES SOME OF THE MOST
SOUGHT AFTER WINES IN THE WORLD.
IN KEENLY AWARE OF THE MANY
CHALLENGES THAT ARE FACING THE
INDUSTRY. IN THE PAST TWO YEARS,
I'VE HAD THE PLEASURE OF WORKING
ON TWO BILLS. THAT WILL BE THE
BENEFIT TO THE WINE INDUSTRY. SB
1013 SENATOR ATKINS FROM 2022,
WHICH I MANAGED FOR THE PRO TIM
IT MIGHT BILL SB 353. SB 1013
WAS SUPPORTED BY THE WINE IS
FREE. APPRECIATE THAT VERY MUCH,
AND I WANTED TO REALLY POINT OUT
TO THE WINE INSTITUTE WORK THEY
HAVE DONE TO TRY TO FIND A SWEET
SPOT IN THIS AREA OVER THE YEARS
HAS BEEN SIGNIFICANT. AND WELL
NOTICED, AT LEAST BY MANY OF US.
HOPEFULLY MANY OF US, UM AND
ADDED ALSO WINE AND SPIRITS
BOTTLES TO THE CRV PROGRAM SP
353, WHICH WAS RECENTLY SIGNED
BY THE GOVERNOR. INCLUDED
CHANGES TO EXISTING LAW TO HELP
WEINERS MEET RECYCLING MANDATES
AS WELL AS SUPPORT RURAL
RECYCLERS, AMONG OTHER
PROVISIONS WITH THAT SAID, WE
KNOW THAT WE NEED TO DO MORE. SO
LET'S HEAR FROM OUR SECOND PANEL
PERTAINING TO THE BOTTLE BILL
AND THE WINE INDUSTRY. I REALLY
PLEASED TO WELCOME REAL PARTNER
IN THIS AREA. RACHEL WAGGONER,
DIRECTOR OF THE CALIFORNIA
DEPARTMENT OF RESOURCE RECYCLING
AND RECOVERY. A K A CALORIE
CYCLE. UH, TIM SMELTER, THE VICE
PRESIDENT OF THE CALIFORNIA WINE
INSTITUTE. AND MORE ABLE DELGADO
, VICE PRESIDENT, DEPUTY GENERAL
COUNSEL E AND J. GALLO WINERY.
WELCOME AND COME ON UP. WE'RE
GOING TO START OFF WITH DIRECTOR
WAGNER. WELL, HELLO THERE. NICE
TO SEE YOU. IT'S BEEN A WHILE.
YEAH. PROCEED. WELL THANK YOU.
THANK YOU SO MUCH FOR HAVING US
AND APPRECIATE YOU HAVING THIS
HEARING AND APPRECIATE THE FACT
THAT HOPEFULLY WE'RE GOING TO
TELL A STORY TOGETHER TODAY
THAT'S A LITTLE LESS NAUGHTY
THAN THE ONE THAT YOU ARE
EMBARKING ON WITH THE PREVIOUS
PANEL, SO AS ALL OF YOU KNOW, OR
ALL OF US KNOW THE BEVERAGE
CONTAINER RECYCLING PROGRAM WAS
INITIATED IN THE MID 19 EIGHTIES
AND 1986. IT WAS ORIGINALLY
INTENDED AS A LITTER REDUCTION
MEASURE TO REDUCE THE AMOUNT OF
ALUMINUM CANS AND GLASS BOTTLES
WE FOUND ON THE ROADSIDE. AND IT
HAS BEEN WHY'D LEE SUCCESSFUL
AND THEN NOT QUITE 40 YEARS IN
DOING THAT? BUT NOW IT IS OUR
PREMIER RECYCLING PROGRAM HERE
IN CALIFORNIA IN 2022, WE
RECYCLED 444 MILLION BEVERAGE
CONTAINERS IN THE STATE OF
CALIFORNIA THAT REPRESENTS
ROUGHLY 70% OF THE BEVERAGE
CONTAINERS SOLD IN THE STATE
COLLECTED AND THEN BROUGHT BACK
INTO THE RECYCLING SYSTEM. BUT
THAT BEING SAID IT WAS TIME IN
THE LAST COUPLE OF YEARS. THE
LEGISLATURE ACKNOWLEDGED ITS
ALONG WITH MANY OF OUR INDUSTRY
PARTNERS THAT IT WAS TIME FOR
THIS PROGRAM TO EVOLVE AND SO
WELL, WE WORK TOGETHER TO MAKE
THAT EVOLUTION HAPPENED. SO VERY
SPECIAL. THANK YOU TO SENATOR
DODD FOR HIS LEADERSHIP, THE PRO
TEM FOR HER LEADERSHIP. IN
INITIATING THAT AS WELL AS OUR
PARTNERS IN THE WINE INDUSTRY,
WHO CAME TO MY FORMER OFFICE IN
THE GOVERNOR'S OFFICE AND SAID
WHAT WE'D REALLY LIKE TO DO IS
HAVE OUR OWN PROGRAM OR JOIN THE
BEVERAGE CONTAINER RECYCLING
PROGRAM BECAUSE WE WANT TO BE A
PART OF THE RECYCLING SOLUTION
FOR THE STATE OF CALIFORNIA. AS
THIS, SENATOR, DODD NOTED, SB
1013 MADE A NUMBER OF DIFFERENT
CHANGES TO THE BEVERAGE
CONTAINER RECYCLING PROGRAM THAT
HELPED WITH THIS EVOLUTION AMONG
THOSE THE WHINE BEVERAGE
CONTAINERS AS WELL AS DISTILLED
BEVERAGE CONTAINERS HAVE JOINED
THE PROGRAM THAT REPRESENTS
ABOUT 1.2 BILLION BOTTLES. IN
THE STATE OF CALIFORNIA ANNUALLY
. AS WE ALL KNOW, WE ARE THE
PREMIER WINE REGION OF THE
COUNTRY. IF NOT, YOU KNOW,
ARGUABLY THE WORLD SO WE HAVE A
BIG TASK IN FRONT OF US TO BRING
THESE NEW BEVERAGE CONTAINERS
INTO OUR PROGRAM, AND WE ARE
WORKING WITH OUR PARTNERS IN THE
WINE INDUSTRY AND THE DISTILLED
SPIRIT INDUSTRY. TO FIGURE OUT
HOW IN A PRE ESTABLISHED PROGRAM
, HOW DO WE CREATE THE
APPROPRIATE COLLECTION SYSTEMS,
RECYCLING SYSTEMS AND
TRANSPORTATION SYSTEMS TO
EFFECTIVELY DO THAT, AND AGAIN
IN SENATOR DODD'S BILL THIS YEAR
SB 353, AS WELL AS 1013 AND THE
BEVERAGE. EXCUSE ME THE BUDGET
BILL THE PREVIOUSLY AREA AS WE
WON 79 A NUMBER OF DIFFERENT
FUNDING PROGRAMS WERE CREATED OR
FUNDING OPPORTUNITIES. I SHOULD
SAY THAT WE ARE BUILDING OUT
INTO A COMPREHENSIVE FUNDING
PACKAGE THAT WE WILL BE ROLLING
OUT IN DECEMBER SO THAT WE CAN
FIND ALIGNMENTS IN THE BEVERAGE
CONTAINER RECYCLING PROGRAM AND
REALLY OPTIMIZED COLLECTION. SO
WHAT WE'RE REALLY OUT TO DO OVER
THE NEXT FEW YEARS. AND WHAT ARE
TRUE GOAL FOR THIS PROGRAM IS TO
BE CAPABLE OF COLLECTING AND
REDEEMING EVERY SINGLE BEVERAGE
CONTAINERS SOLD IN THE STATE OF
CALIFORNIA. AND THAT REALLY
MEANS CREATING CONVENIENT ACCESS
FOR EVERY CALIFORNIAN TO
PARTICIPATE IN THIS PROGRAM. IT
MEANS OPTIMIZING OUR RECYCLING
SYSTEM AND REALLY INNOVATING AND
BUILDING ON CALIFORNIA'S
INNOVATION SPIRIT. BY DEPLOYING
ALL OF THE DIFFERENT TYPES OF
TECHNOLOGY THAT HAVE BEEN
DEVELOPED OVER THE LAST DECADE
OR SO, AND WE'RE WORKING WITH
OUR PARTNERS TO DO ALL OF THOSE
THINGS. AND SO WITH THAT I AM
GOING TO TURN IT BACK OVER TO
THE CHAIR. THANK YOU VERY MUCH.
MISS WAGNER. APPRECIATE THAT
PRESENTATION. OUR NEXT PANELIST
IS TIM SMELTER WITH THE WINE
INSTITUTE. HELLO, TIM. HOW ARE
YOU DOING? UM REALLY GLAD I
COULD BE HERE TODAY. FEEL SILLY
INTRODUCING MYSELF TO YOU, BUT I
KNOW WE'RE THREE MINUTES. TIM
SMELLS, ER VICE PRESIDENT,
CALIFORNIA STATE RELATIONS WITH
WINE INSTITUTE WE HAVE ABOUT
1000 MEMBERS OF ALL SHAPES AND
SIZES THROUGHOUT THE STATE.
CERTAINLY IN EVERY WINE REGION,
WE ARE THE PREEMINENT
ORGANIZATION REPRESENTING
CALIFORNIA WINE NOT JUST IN
CALIFORNIA BUT THROUGHOUT THE
COUNTRY AND THE WORLD. UM I WANT
TO. I KNOW YOU. YOU SPOKE A
LITTLE BIT ABOUT THE INDUSTRY IN
ITS SIZE AND STUFF. BUT I WANTED
TO FOCUS ON THAT BECAUSE I THINK
THE EVERYTHING RACHEL SAID IS
TRUE AND THANK YOU AND WE
APPRECIATE IT AND THE
LEGISLATION HAS BEEN GREAT.
GETTING THE WORD OUT TO THE
WINERIES IS THE THING THAT KEEPS
ME UP AT NIGHT. RIGHT NOW. IT
REALLY DOES. UM IN CALIFORNIA.
WE HAVE OVER 6000 BONDED
WINERIES SUPPORTS OVER 422,000
JOBS IN CALIFORNIA. AND WHILE WE
ARE DEFINITELY AMERICA'S NUMBER
ONE, WE'RE ONLY FOURTH IN THE
WORLD. SADLY WE'RE WORKING ON
THAT. BUT WE SELL ALMOST 240
MILLION CASES OF WINE
NATIONWIDE. ANOTHER 41 MILLION
ARE SOLD. BUT THE REAL NUMBER TO
REMEMBER THERE IS THE NUMBER OF
WINERIES. SIX THE BOTTLE BILL
HAS DIDN'T RESEARCH THIS, BUT I
KNOW THIS. THERE'S NO WAY YOU'VE
HAD THIS MANY NEW ENTRANTS AT
ONCE, AND IT IS THAT'S GREAT
INDIVIDUAL MANUFACTURERS SINCE
THE BEGINNING OF THE PROGRAM, UM
AND IT'S JUST IT'S A REAL
CHALLENGE. IT'S A CHART. WE DID
THE CHALLENGE WE TAKE SERIOUSLY
AT ONE INSTITUTE. I'M SURE IT'S
A HUGE CHALLENGE FOR CALORIE
CYCLE. AND IT'S NOT LIKE THERE'S
YOU KNOW, 6200 E AND J. GALLO IS
OUT THERE WHO ARE YOU KNOW WE'RE
LUCKY TO HAVE MARY BELL WITH
THEM AND ARE VERY SOPHISTICATED.
MOST OF THESE ARE VERY SMALL,
FAMILY OWNED BUSINESSES AND
EVERY TIME YOU KNOW, WE HOST A
LOT OF WEBINARS, THAT WINE
INSTITUTE. I'M I'M BASICALLY
GOING ON THE ROAD THIS MONTH TO
TALK TO DIFFERENT REGIONAL WINE
ASSOCIATIONS. THEY APPRECIATE
THE FESTIVE FACE AND BEING ABLE
TO ASK QUESTIONS AND SUCH
ESPECIALLY FROM SOMEBODY'S
REPRESENTS THEM AS WELL. FIRST
TIME AND THE FIRST THING I GET
MOST OF TIME IS OH, MY GOD, THIS
IS STARTING JANUARY 1ST, AND WE
HAVE BEEN PUSHING OUT
INFORMATION ALL YEAR, BUT JUST
GET MAKING FOLKS AWARE OF IT IS
HUGE. IT'S A REAL BIG ISSUE, AND
THEY NEED TO REGISTER. THEY NEED
TO GET REGISTERED. PRIOR TO
JANUARY, THEY'RE GOING TO NEED
TO START REPORTING PAYING FEES
ON A MONTHLY BASIS, AND THERE'S
A LOT COMING UP FOR THESE FOLKS.
AND DESPITE BEST EFFORTS, I HAVE
CONCERNS ABOUT ESPECIALLY OUR
SMALLER WINERIES ARE AT THE
STATE OF AS WHETHER THEY'RE
AWARE AND KNOW WHAT TO DO AS
HARD AS WE'RE TRYING. SO I JUST
WANT YOU TO BE AWARE OF CONCERNS
THAT WAY AND WE'RE DOING WHAT WE
CAN TO HELP WITH THAT WINE
INSTITUTE FOR ITS PART BESIDES
SENDING ME OUT ON A BOTTLE, BILL
ROADSHOW. WE ALSO HAVE DEVELOPED
OUR OWN PUBLIC FACING PAGE, NOT
JUST FOR ONE AND SUIT MEMBERS TO
TRY TO CONSOLIDATE A LOT OF THE
INFORMATION AVAILABLE IN CALORIE
CYCLES PAGE TO BE IN, YOU KNOW,
11 EASY TO FOLLOW SPOT, AND YOU
KNOW, WE'VE HEARD A LOT OF GOOD
FEEDBACK FROM THAT THAT THAT'S
THAT'S HELPED. UM BUT IT'S
SOMETHING WE'RE REALLY FOCUSED
ON. THAT'S A THAT'S A LOT OF NEW
FOLKS OUT THERE SMALL BUSINESSES
THAT ARE GOING TO HAVE TO COMPLY
WITH RULES THEY JUST HAVEN'T HAD
TO CONSIDER BEFORE. EVEN THOUGH
I THINK A LOT OF THEM THAT THAT
WILL BE ETCETERA EXCITED TO BE
PART OF THIS RESTOCKING PROGRAM.
I THINK THE INDUSTRY IS REALLY
HOW DOES IT GO FOR A LONG TIME
TO DO BETTER THERE YOU YOU KNOW,
YOU'VE HEARD US TALK A LOT ABOUT
OUR CREDENTIALS WITH REGARD TO
SUSTAINABILITY. I'VE ALWAYS FELT
THAT WAS A LITTLE BIT OF
ARTICULAR. HE'S HELL. FRANKLY
AND WE'RE PROUDLY GOING INTO
THIS PROGRAM, SO WE'RE GRATEFUL
BUT NERVOUS. UM. YOU KNOW ALL
THE ALL THAT BEING SAID, YOU
KNOW, WE ARE VERY GRATEFUL FOR
THE PROVISION IN BOTH SB 1013
THAT YOU HELPED SHEPHERD WITH,
ALONG WITH PRO TIM ATKINS AND I
WANT TO ESPECIALLY SHOUTOUT FOR
SP 353 SP 353 CONTAINED A COUPLE
OF PROVISIONS AS SENATOR, I'M
NOT EVEN SURE IF YOU KNOW A FEW
AND HALF KNOW HOW GRATEFUL THE
INDUSTRY IS FOR SOME OF THE
PROVISIONS. THIS LEGISLATION,
BUT ONE OF THE WE HAD A COUPLE
REAL SCARY THINGS THAT WE
DISCOVERED UPON SB 10/13 PASSAGE
. YOU'RE ALL PROBABLY PRETTY
AWARE OF THE FACT THAT
CONTAINERS NEED TO CONTAIN A CRV
IN DC ON THEM, AND WHILE THE
INDUSTRY WAS GRANTED SOME EXTRA
TIME TO GET THERE IN THE WINE
INDUSTRY, MOST WINE AGES FOR A
LONG TIME BEFORE EVEN COMING TO
MARKET AND IT WAS A HUGE, HUGE
ISSUE FOR WINERIES THAT HAVE
PRODUCT AND SORTS. IT MIGHT NOT
EVEN BE FIRST GO FOR SALE UNTIL
JULY 2025 THAT THIS IS BEEN
FILLED AND LABELED AND SITTING
DOWN FOR A FEW YEARS TO AGE TO
BE READY FOR MARKET AND OF
COURSE, THEY DIDN'T EVEN HAVE AS
A CLUE THAT THIS WAS COMING
ALONG AT THE TIME. YOUR BILL
RECOGNIZED THAT ISSUE, AND WE'RE
VERY GRATEFUL THAT THE PRODUCTS
THAT WERE FILLED IN LABELED
PRIOR TO JANUARY 1ST 2024 ARE
GOING TO BE GRANDFATHER AND I
CANNOT TELL YOU WHAT A HUGE SIGH
OF RELIEF AND IT'S ALSO REALLY
FUN TO BE ABLE TO GIVE GOOD
NEWS. WHEN I GET CALLED ON
BOTTLE THAT WAS ABSOLUTELY HUGE
CREDIT. YEAH, WELL, YOU GOT IT
THROUGH AND ANOTHER THING THAT
SEEMS A LITTLE SEEMS OBSCURE,
BUT ALSO SOMETHING UNIQUE TO THE
WINE INDUSTRY IS EXTREMELY
COMMON TO USE A THIRD PARTY
BOTTLER IN OUR INDUSTRY AND THE
WAY THAT THE BEVERAGE
MANUFACTURERS DEFINED DEFINED
AND THIS AFFECTS GREATLY WHAT
YOUR RESPONSIBILITIES ARE FOR
COMPLIANCE, SAID THAT ANYBODY
WHO FILLED THE CONTAINER IS A
MANUFACTURER, ESSENTIALLY. WELL
I DIDN'T GET NUMBERS ON THIS,
BUT I MEAN, WE'RE TALKING LIKE
80% OF WINERIES USE A THIRD
PARTY EVEN THOUGH THE BOTTLER
PULLS UP BASICALLY BOTTLES OF
WINE BECAUSE THE WINE BACK
THEY'RE GONE THE NEXT DAY, YOU
KNOW, YOU'LL SEE IT. SEE YOU
NEXT YEAR AND SUDDENLY UNDER
UNDER THE DEFINITION PRIOR TO
THE PASSAGE OF SB 353. THEY
WOULD HAVE BEEN RESPONSIBLE FOR
PAYING THE PROCESSING FEES EVEN
THOUGH THEY HAD NO KNOWLEDGE OF
THE SALES OF THE WINE OR
ANYTHING, AND WE ARE ABLE TO
WORK WITH YOU. AND REALLY, THIS
IS GREAT PARTNERSHIP WITH
CALORIE CYCLE HERE AND ERIN
THANK YOU PARTICULAR, WE'RE ABLE
TO WORK OUT A DEFINITION THAT
RECOGNIZED THAT JUST BECAUSE
SOMEBODY BOTTLES IT IF THEY'RE
NOT THE ONES SELLING IT, IT
MAKES NO SENSE TO PUT THAT
COMPLIANCE BURDEN ON THEM. THAT
ERASED A HUGE CLOUD OF CONFUSION
IN THE INDUSTRY. SO WE'RE JUST
EXTREMELY GRATEFUL FOR BUT OF
THOSE THINGS. THANK YOU. UM THAT
BEING SAID, YOU KNOW, THERE ARE
SOME CHALLENGES THAT REMAIN ONE
OF ONE OF THE SIGNIFICANT THINGS
THAT WE DID WITH SB 1013. AND
THIS WAS AT OUR REQUEST IS THAT
WE'RE BRINGING NEW CONTAINER
TYPES INTO THE PROGRAM THAT WE
HAVEN'T PREVIOUSLY SEEN IN THE
BOTTLE, BILL. YOU KNOW, WE'VE
HAD GLASS AND ALUMINUM AND PTT
AND PROBABLY A COUPLE OF OTHERS.
BUT YOU KNOW, WE'RE BRINGING
BACK IN THE BOX AND WE'RE GOING
TO BRING SOME SIGNIFICANT TETRA
IN AND YOU KNOW, I'VE HAVE
MEMBERS THAT ARE CONCERNED WITH
THESE NEW CONTAINER TYPES. YOU
KNOW, THEY'RE NOT IT'S NOT CLEAR
YET HOW THEY SHOULD BE TELLING
THEIR CONSUMERS HOW TO RECYCLE
THEM. YOU KNOW, WE'RE GRATEFUL
THAT CALORIE CYCLE IS GOING TO
BE MAKING SOME TIME AVAILABLE TO
TALK THROUGH THESE ISSUES. BUT
THERE ARE COMPLICATED, YOU KNOW,
LIKE, FOR EXAMPLE, IN BAG IN BOX
THAT I THINK A LOT OF FOLKS
BELIEVE THE STANDARD SHOULD BE
TAKING THE POUCH OUT OF THE BOX.
SHOULD WE BE TELLING THAT TO OUR
CONSUMERS? IT'S NOT, YOU KNOW,
NOT CLEAR HOW TO DO THAT. WE
HAVE RECYCLING SYSTEMS THAT NEED
TO BE DEVELOPED TO ADDRESS THESE
PROGRAMS. AND THEN FINALLY, UM
YOU KNOW, WE HAVE AN ISSUE WHERE
THE CRV THAT WE ATTACH TO ALL OF
THOSE CONTAINERS IS RATHER HIGH
25 CENTS VERSUS THE 10 AND FIVE
THAT'S FOR THE EXISTING PROGRAM.
THIS IS SOMETHING THAT WE HOPE
TO WORK WITH THE LEGISLATURE ON
THIS COMING YEAR TO ADDRESS,
PARTICULARLY, UM. ONE OF THE
THINGS I THINK I WISH WE'D HAD
BEEN THINKING OF MORE OF WE
DIDN'T MAKE A DISTINCTION
BETWEEN VOLUME AT ALL WITH THESE
NEW CONTAINERS, AND SO THE SAME
CONTAINER THAT MAY HOLD FOUR
BOTTLES OF WINE, YOU KNOW, IN A
BAG IN THE BOX SITUATION VERSUS
SOMETHING THAT'S A SINGLE SERVE.
BOTH OF THEM PAY 25 CENTS FOR A
CRV, WHICH. ALL THE OTHER
EXISTING CONTAINERS. THERE'S A
RECOGNITION THAT A SMALLER
CONTAINER SHOULD BE A SMALLER
AMOUNT. SO I JUST WANT TO KIND
OF FLAG THAT AS AN ISSUE THAT
THAT WE'D LIKE TO ADDRESS MOVING
FORWARD, BUT OTHERWISE, I THINK
WE SHOULD PROBABLY STOP CHANGING
QUITE SO MUCH, NOT THAT BEING
SAID, HEY, IT MAKES US ALL
CRAZY, BUT ANYWAY, IT'S BEEN
REALLY WONDERFUL TO HAVE SUCH A
GREAT WORKING RELATIONSHIP WITH
CALORIE CYCLE AND PARTICULARLY
SENATOR DODD ON THESE ISSUES. I
DON'T KNOW HOW WE WOULD HAVE
GOTTEN HERE WITHOUT THAT. THAT
KIND OF PARTNERSHIP AND THANK
YOU FOR HAVING ME THANK YOU, MR
MELTZER. MISKELL GADO. WELCOME
THANK YOU FOR BEING HERE. THANK
YOU FOR INVITING ME. UM
MIRABELLE DELGADO. I AM WITH THE
GALA WINERY. UM AND EVERYONE, AT
LEAST IT SEEMS LIKE EVERYONE
KNOWS GALA WINERY. BUT I'M HERE
TODAY TO TALK ABOUT REALLY ONE
BUT RELATED OTHER ENTITIES THAT
ARE PART OF THE WINERY AND HOW
WE WILL DO OUR PART, HOPEFULLY
TO BRING DIRECTOR ALL OF THOSE
CONTAINERS BACK INTO THE
RECYCLING SYSTEM. WE ARE
COMPLETELY ALIGNED IN THAT VIEW,
SO AS YOU MAY OR MAY NOT KNOW
GALLO ALSO MAKES ALL OF ITS OWN
GLASS. SO WE DO HAVE THE GALA
GLASS PLANT. IT WAS BUILT IN
1958. AND ABOUT 60% OF THE
PRODUCTION IS FOR THE GALA
WINERY. BUT 40% IS FOR THE REST
OF THE CALIFORNIA WINE INDUSTRY,
SO WE DO HAVE A NUMBER OF
OUTSIDE SALES. IN ADDITION, THE
NEWEST PART OF THE ENTITY IS
HALO GLASS. SO HALO GLASS IS A
RECYCLING GLASS PROCESSING PLANT
. SO WHAT THAT PLANT DOES IS IT
CONVERTS POST CONSUMER AND CLEAN
CONTAINER GLASS INTO USABLE
COLORED IS RECYCLED IS RECYCLED
CLASS. IT CRUSHES IT, CONOR
SORTS AND SIZES THE MATERIAL FOR
RE MELTING TO MANUFACTURE INTO
NEW BOTTLES. AND THEN ALL THAT
PROCESSED MATERIAL IS SENT
DIRECTLY TO GALLO GLASS
CURRENTLY WE JUST STARTED
OPERATIONS. IT BECAME FULLY
OPERATIONAL IN MAY OF 2023, BUT
REALLY, WE'VE BEEN STABLE IN
TERMS OF OPERATIONS FOR THE LAST
THREE MONTHS. LOTS OF LEARNINGS.
THIS IS A COMPLETELY DIFFERENT
BUSINESS MODEL THAT WE HAVE NOT
BEEN INVOLVED IN. UM THE
MAJORITY OF THE ISSUES AT THE
PLANT HAVE ONLY BEEN AROUND FINE
TUNING FOR QUALITY. IT'S REALLY
IMPORTANT THAT THE QUALITY OF
THE MATERIAL THAT IS GOING INTO
THE FURNACES BE GLASS AND NOT BE
CONTAMINATED WITH CERAMIC OR
PORCELAIN. OR BATTERIES. THAT'S
ANOTHER CONTAMINANT THAT REALLY
WE SEE COMING THROUGH. AND
REALLY, WE'RE RECEIVING AND
PROCESSING FROM CURBSIDE
MATERIAL RECOVERY FACILITIES. SO
MURPH SO IS WHAT THOSE ARE
CALLED A LOT OF TIMES THAT IS
SINGLE STREAM MATERIAL. SO WHEN
WE RECEIVED THAT IT REALLY DOES
LOOK LIKE GARBAGE AND SO THAT
NEEDS TO BE CLEANED AND
PROCESSED THROUGH. ALSO FROM
THIS YEAR, THE REDEMPTION
CENTERS AND THAT, OF COURSE, IS
THE CLEANER THAT REALLY KIND OF
THE CLEANEST MATERIAL THAT WE
GET, UM OTHER THAN WE MAY GET.
WE DO ON OCCASION GET CLEAN
BOTTLES FROM WINERIES. THAT FOR
EXAMPLE, MAY BE ORDERED TOO MUCH
IN TERMS OF STOCK. AND THEN
THEY'RE MARKETERS COME WITH THE
BRILLIANT NEW IDEA WITH NEW
PACKAGING AND A NEW, SNAZZY
BOTTLE. AND SO THEN, YOU KNOW,
SO WE MAY GET CLEAN MATERIAL
THAT WAY. SO SCRAP GLASS FROM
CPG COMPANIES AND OTHER WINERIES
IS ALSO ANOTHER SOURCE. MANY
PEOPLE HAVE ASKED. WHY DID YOU
BUILD HALO? HALO GLASS WHITE?
YOU KNOW, HOW IS GALLO WINERY
NOW? PROCESSOR CLASS PROCESSOR.
WE REALLY DID BUILD IT TO ENSURE
A STABLE KOLET SUPPLY FOR GLASS
MANUFACTURING. WE DO HAVE
REQUIREMENTS IN THE STATE FOR
POST RECYCLED CONTENT IN OUR
BOTTLES, WHICH WE'RE HAPPY TO
HAVE, AND WE WANT TO HAVE MORE,
BUT IT REALLY WAS. YOU KNOW ALL
OF THE CHALLENGES WITH THE
RECYCLING CENTERS THAT CLOSED,
UM PEOPLE ARE USING LESS GLASS
AS JUST JUST GETTING GLASS BACK
AND HAVING A PROCESSED HAS
GOTTEN DIFFICULT. SO GALLO DID
WHAT IT OFTEN DOES, WHICH IS
WHAT WE CAN DO IT BETTER WE'LL
DO IT OURSELVES, AND THE FAMILY
HAS HAD THAT ATTITUDE. UM AND
THAT THAT SPIRIT YOU KNOW,
THROUGHOUT ITS TIME HERE IN
CALIFORNIA. UM ONE FUN FACT. I
DID NOT KNOW THIS UNTIL HALO.
GALLO CAN TAKE RECYCLED GLASS.
CONVERTED INTO A BOTTLE. AND
FILL IT WITH WINE AND HAVE THAT
ON THE SHELF IN FOUR WEEKS. SO
IT IS WHAT WE WERE STRIVING FOR,
WHICH IS THE EPITOME OF THE
CLOSED LOOP. WE MAKE THE GLASS.
WE FILL THE GLASS. WE RECYCLE
THE GLASS AND PUT IT BACK INTO
THE FURNACE. AND THAT WAS WHEN
WE CAME AND TALKED TO DIRECTOR
WAGNER AND HER OTHER ROLE, IT
WAS WITH THE VISION OF GETTING
AS MUCH RECYCLED MATERIAL. OUT
OF THE SYSTEM AS POSSIBLE. AND
WHAT WOULD BE THE IDEAL WAY TO
DO THAT? WE HIRED CONSULTANTS TO
HELP US WORK ON THAT, AND THEY
WERE BRILLIANT. IT WAS A LITTLE
TOO MUCH TOO SOON FOR CALIFORNIA
, AND SO WE DIDN'T. WE WERE NOT
ABLE TO GO IN THAT DIRECTION, SO
WE WERE HAPPY TO BE ABLE TO JOIN
THE PROGRAM AND FORM REALLY A
GREAT PARTNERSHIP WITH DIRECTOR
WAGNER AND THE DEPARTMENT.
SEVERAL ENVIRONMENTAL BENEFITS
TO USING COLORED OVER RAW
MATERIALS TO MAKE GLASS. IT'S
JUST GREAT GREENHOUSE GAS
REDUCTION IS THE MAIN
ENVIRONMENTAL BENEFIT FOR EVERY
SIX TONS OF COAL. IT BETTER
EXCUSED. ONE TON OF CARBON
DIOXIDE IS SAVED, MEANING IT'S
NOT EMITTED INTO THE AIR, AND
THERE IS ALSO ENERGY SAVINGS
RELATED TO THE USE OF COAL. IT A
10% INCREASE IN COLOR. IT
REDUCES ENERGY USE BY 2 TO 3%
WHICH IN TURN ALSO SAVES THE
EMISSION OF CO. TWO. AND JUST
SUBSTITUTING THE RAW MATERIALS,
TON OF COAL. IT REDUCES RAW
MATERIAL USED BY 1.2 TONS AND
THE EMITTERS OF CO. TWO ARE
PRIMARILY SODA, ASH AND
LIMESTONE. SO IF WE'RE NOT USING
THAT, AND WE'RE USING COAL IT
THEN WE'RE REDUCING THE
GREENHOUSE GAS EMISSIONS. I'M
CURRENTLY GALLO GLASS HAS AN
ANNUAL PRODUCTION OF HIGH
500,000 MELTED TONS FROM THE
FURNACES. WE WOULD LIKE TO GET
TO A 70% RECYCLED CONTENT IN THE
AGGREGATE IN OUR BOTTLES. UM
CURRENTLY, UNFORTUNATELY, WE'RE
PROBABLY BETWEEN 35 AND 40%
THAT'S GONE DOWN FROM WHAT WE
FROM ABOUT FOUR OR FIVE YEARS
AGO BEFORE THE CLOSURE OF MANY
OF THE RECYCLING CENTERS. WE
WERE ABLE TO HAVE MORE GLASS
COMING THROUGH, UM RIGHT NOW AND
GOING FORWARD. 100% OF THE GLASS
IS GOING THROUGH HALO IS BEING
RECYCLED. WE HAVE THE ABILITY TO
TAKE WHAT IS WHAT IS KNOWN AS
FINES. SO IT'S THE PIECES OF
GLASS THAT ARE LESS THAN 1/8 OF
AN INCH FURTHER PROCESS THOSE
AND WE HAVE TWO STREAMS. ONE
STREAM IS WHAT WE ARE STILL ABLE
TO GET IN TERMS OF CLASS THAT
CAN GO INTO THE FURNACE. AND THE
REST IS MATERIAL THAT IS SOLD TO
A COMPANY THAT IS BASED OUT OF
PENNSYLVANIA. THEIR NAME IS
ARROW, AND THEY MAKE FOAM GLASS
AGGREGATE FOR CONSTRUCTION FOR
THE CONSTRUCTION INDUSTRY, AND
THEY ARE RIGHT NEAR OUR PLANT,
SO ANY OF THE FINES THAT CANNOT
BE USED FOR CONTAINER GLASGOW TO
ARROW? SO THAT ALLOWS US TO HAVE
A FACILITY WHERE 100% OF THE
MATERIAL THAT COMES IN IS
RECYCLED. I THINK YOU KNOW TO
DIRECTOR WAGNER'S POINT, UM, THE
CHALLENGE THAT WE HAVE, AND WHAT
WE'RE HOPING TO SEE DEVELOP IS
JUST A RE STIMULATION OF THE
RECYCLING INFRASTRUCTURE, AND
CONSUMERS REALLY DO NEED MORE
ACCESS POINTS, CONVENIENT ACCESS
POINTS. WE'RE HOPING THAT WITH
SOME OF THE PILOT PROJECTS AND
THE RETAILERS, COOPERATIVE
LANGUAGE THAT WAS IN THERE AND
THE ABILITY FOR THE RETAILERS TO
HAVE THOSE COOPERATIVES THAT
THAT WILL ALSO STIMULATE
ADDITIONAL MATERIAL. UM AND WE
SHOULD THINK ABOUT HOW CAN WE
SUPPORT THE MURPH THE MATERIAL
RECOVERY FACILITIES IN PUTTING,
POTENTIALLY PUTTING IN GLASS
CLEAN UP SYSTEMS. THERE'S MANY
THINGS THAT CAN BE DONE AT THE
MURPH LEVEL THAT WILL JUST HELP
WITH THE QUALITY OF THE MATERIAL
. UM THERE'S A THERE'S A
GRASSROOTS EFFORT. IT'S A IT'S
CALLED THE GLASS RECYCLING
POLISH IN IT. IT'S KIND OF IT'S
A NATIONWIDE COALITION, AND IT'S
GOT CITIES AND MUNICIPALITIES,
WASTE HAULERS, BRAND OWNERS,
ETCETERA. AND THEY HAVE A
CERTIFICATION PROGRAM. THAT MANY
MURDERS HAVE TAKEN ADVANTAGE OF
THEY GO. THEY LOOK AT THE
MATERIAL THEY PROVIDE ADVICE ON
HOW TO CLEAN UP THE MATERIAL AND
THEY CAN GET THE CERTIFICATION.
AM AWARE THAT THERE IS A MURPH
IN AUSTIN, TEXAS, WHO RECENTLY
GOT THE CONTRACT, UM FOR THE
CITY OF BOSTON. BASED ON THE
CERTIFICATION, JUST THE FACT
THAT THEY HAD THIS SO THERE'S
LOTS OF THINGS THAT CAN BE DONE,
AND WE HOPE TO WORK WITH THE
WITH THE DEPARTMENT AND ANY
OTHER STAKEHOLDERS WHO ARE
INTERESTED IN INCREASING THE
AMOUNT OF RECYCLED MATERIAL THAT
WE CAN GET OUT OF THE SYSTEM AND
PUT IN A CLOSED LOOP IF AT ALL
POSSIBLE. TERRIFIC. THANK YOU.
THANK YOU. SO THANK YOU TO THE
PANELIST, SENATOR BARNEY. HAVE
ANY QUESTIONS? THANK YOU SO
MUCH. MR. CHAIR BE BRIEF. BUT
MADAM DIRECTOR AND THANK YOU SO
MUCH FOR BEING HERE. IT'S GOOD
TO SEE YOU. AS ALWAYS, UM TALK
ABOUT NEXT STEPS WORKING WITH
THE INDUSTRY, RIGHT AS WE AS
JANUARY IS ON THE HORIZON, WHAT
THAT LOOKS LIKE AND YOU BELIEF
IN YOUR BELIEF MOST IMPORTANT
ACCEPTS WITH INDUSTRY. I WANT TO
ECHO TIPS CONCERNED ABOUT
BRINGING IN ESPECIALLY SMALL
MANUFACTURERS. AND FROM OUR
CYCLES PERSPECTIVE IN MY
PERSPECTIVE. AND HAVING YOU KNOW
MANY, MANY YEARS AS A
LEGISLATIVE STAFFER, OUR BIGGEST
INTEREST HERE AND ACROSS ALL OF
OUR PROGRAMS, BUT REALLY, AS
WE'RE EMBARKING ON THIS IS TO
GET ALL OF OUR PARTICIPANTS INTO
COMPLIANCE. I DON'T SIT AROUND
WAITING TO LEVY PENALTIES AND
RIGHT TO GET PEOPLE. THE IDEA IS
TO GET FULL COMPLIANCE AND TO
ENSURE THAT CALIFORNIANS ARE
GIVEN THE GREATEST LEVEL OF
ACCESS, BUT THAT'S NOT JUST AS
INDIVIDUAL CONSUMERS. BUT THE
MANUFACTURERS, THE READER
TAYLOR'S THEY'RE RECYCLERS THAT
EVERYONE IS ABLE TO EFFECTIVELY
ACCESS THIS PROGRAM IN A WAY
THAT WORKS FOR THEM AS A LARGE
MANUFACTURER LIKE GALLO RECYCLER
NOW, AS WELL AS OUR FRIENDS,
RELIC WHO ARE GOING TO HAVE TO
PARTICIPATE IN THIS PROGRAM AS
WELL. SO WE HAVE CONDUCTED SIX
WEBINARS ALREADY THIS YEAR ON
THE VARIOUS FACETS OF THE
CHANGING PROGRAM. WE HAVE THREE
MORE OF THIS YEAR. WE RECOGNIZE
THAT OUR PARTNERSHIP WITH THE
WINE INSTITUTE IS SO CRUCIALLY
IMPORTANT BECAUSE OF THAT
CONNECTION DIRECTLY TO THEIR
MEMBERS. AND WE REALLY, YOU
KNOW, OFFER AND CONTINUE TO
OFFER TO TIM. HOW CAN WE BE? UH
UM, A BETTER PARTNER. HOW CAN WE
PROVIDE MORE INFORMATION?
ADDITIONALLY WE HAVE MADE
CHANGES TO OUR WEBSITE SO THAT
REGISTRATION SHOULD BE REALLY
EASY, STRAIGHTFORWARD. YOU CAN
DO IT RIGHT ONLINE. AND THEN WE
HAVE ON OUR WEBSITE AND PHONE
NUMBERS. YOU CAN CALL TO ASK
DIRECT QUESTIONS. EMAILS YOU CAN
SEND, SO WE'RE REALLY HOPING
THAT THAT HELPS CULTIVATE THE
RELATIONSHIP FOR THE
MANUFACTURERS WITH THE
DEPARTMENT AS THEY COME INTO
THIS PROGRAM AND THAT WE CAN
JUST BE A PARTNER IN THE COMING
YEAR TO HELP FACILITATE COMING
INTO THIS PROGRAM. WE WANT THIS
TO BE POSITIVE FOR EVERYONE. WE
ALSO NEED TO ENSURE THAT WE ARE
AS THE FIDUCIARY OF CALIFORNIA'S
THAT CRV THAT NICKEL AND DIME
BRINGS IN WELL OVER A BILLION
DOLLARS EVERY YEAR. AND AS THE
FIDUCIARY OF THAT MONEY WE TAKE
VERY SERIOUSLY THE PROTECTION OF
THOSE FANS AND UTILIZING THEM IN
THE MOST EFFECTIVELY POSSIBLE.
AND SO BUILDING UTILIZING THE
APPROPRIATIONS THAT WE'VE BEEN
GIVEN OVER THE LAST COUPLE OF
YEARS TO HELP RURAL RECYCLERS IN
353 GET THAT GLASS BACK TO THE
PROCESSING CENTERS BECAUSE WE
RECOGNIZE THAT CLASSES SO MUCH
HEAVIER THAN OTHER MATERIALS. WE
REALLY WANT TO HELP FACILITATE
THOSE THAT THE FIRST SEVERAL
YEARS OF THAT COLLECTION SYSTEM
HOW DO WE BUILD OUT OUR NEW
DEALER COOPERATIVES THAT WILL BE
COMING ONLINE? IN 2025. HOW DO
WE BUILD THAT SYSTEM TO BE AS
CONSUMER FRIENDLY BUT ALSO
MANUFACTURER FRIENDLY AND
RECYCLER FRIENDLY SO THAT WE'RE
REALLY BUILDING A WHOLE SUITE OF
SOLUTIONS THAT CAN BE TAILORED
BY REGION OF THE STATE. I THINK
ONE OF THE THINGS AS TIM POINTED
OUT WITH THE CHANGE IN THE
DEFINITION, AS OF MANUFACTURER
AND BEVERAGE CONTAINER. I OFTEN
TIMES POINT TO THE BOOK THAT
SITS ON MY DESK. THAT IS THE
STATUTE THAT IS THE BOTTLE BILL.
IT IS VERY VERBOSE. AND WHILE I
HAVE THE UTMOST APPRECIATION FOR
GOOD LEGISLATION AND STATUTE,
HAVING WORKED ON IT IN MY ENTIRE
CAREER, THERE ARE A LOT OF WORDS
IN THIS IN THIS LEGISLATION THAT
HAVE FORMED OVER NEARLY 40 YEARS
SO IT CAN SOMETIMES BE TOO
PRESCRIPTIVE. BUT I THINK THE
CHANGES OF SB 1013 AND THEN SP
353 HAVE PROVIDED US SOME NEW,
FLEXIBLE SOLUTIONS THAT WE CAN
REALLY ILLUSTRATE THAT THAT
CONVENIENCE AND THAT PARTNERSHIP
WITH THE VARIOUS PEOPLE IN OUR
SUPPLY CHAIN AND BUILDING THAT
CLOSED LOOP SO THAT WAS MY LONG
WINDED WAY OF SAYING THAT I
THINK IN THE COMING YEAR WHAT WE
WILL SEE IS ROLLING OUT SOME OF
THESE NEW SOLUTIONS. BUT
PRIMARILY A LOT MORE
CONVERSATIONS ABOUT HOW DO WE
PARTNER AND HELP HELP EACH OTHER
? WE WE'VE WORKED A LOT ON
SEVERAL ISSUES AND ESPECIALLY ON
FIRE, AND I JUST CANNOT SAY
THANK YOU ENOUGH DIRECTOR AND
WHOLE OTHER SIDE OF YOUR
AGENCIES ON DEBRIS AND MOVE ON.
I WON'T SWEAR. BUT WHAT SHOW
THAT IS AT TIMES RIGHT IN HOW
YOU REALLY STREAMLINE THE
PROCESS AND GRATEFUL FOR THAT,
UM WOULD IT BE ACCURATE TO SAY
THIS IS A TRANSITION YEAR, RIGHT
OF WORKING WITH INDUSTRY? DEB
MAKE THIS AS SMOOTH AS POSSIBLE,
BUT UNDERSTANDING THAT THERE ARE
GOING TO BE BUMPS ALONG THE WAY
AS WE IMPLEMENT THIS. WOULD THAT
BE A FAIR ASSESSMENT? THAT'S
ABSOLUTELY RIGHT. I THINK 2024
WILL BE A TRANSITION YEAR. WE
DON'T WANT TO MAKE 2025 A
TRANSITION. WHERE AS WELL WE
WANT TO MAKE THIS. WE WANT TO DO
THIS AS QUICKLY AS POSSIBLE.
FIND THE HURDLES AND OVERCOME
THEM TOGETHER, SO WE DON'T WANT
TO BE, UM, THE BIG BAG REGULATOR
. WE WANT TO BE THE PARTNER IN
HELPING TO IDENTIFY THE HURDLES
AS TIM DID LAST YEAR AND SAY,
OH, HOW DO WE FIX THAT? CAN WE
WORK TOGETHER TO GET EITHER
LEGISLATIVE FIXES OR REGULATORY
FIXES? GALLO IF I CAN SHARE THIS
MIRABEL WITH THE QR CODES
BROUGHT TO US CONCERN AROUND
LABELING, WHICH WE'RE REALLY
EXCITED BRINGS, AS I OFTENTIMES
SAY, CHALLENGES BRING OPERA. Tð
NITTY ONE OF THE THINGS THAT ARE
PARTNERS IN THE WINE INDUSTRY OR
CHALLENGED WITH IS THE CRV
LABELING REQUIREMENTS THAT EXIST
IN STATUTE AND CODE. WE WILL BE
EMBARKING IN 2024 ON NEW
REGULATIONS TO ALLOW Q R CODES
TO REPLACE THE STANDARD LABELING
REQUIREMENTS THAT HAVE EXISTED
FOR MANY DECADES SO AS EACH NEW
CHALLENGE IS IDENTIFIED, OR
REALLY HOPEFUL THAT WE CAN WORK
TOGETHER TO FIND, IF NOT
CONSENSUS AGREEMENT. AND HOW DO
WE SOLVE THIS BARCODE ALSO
PRESENTS LOTS OF OPPORTUNITY FOR
GATHERING ADDITIONAL DATA, WHICH
WE HAVE NEVER HAD BEFORE IN THE
INDUSTRY AS WELL AS THE
REGULATOR, SO THESE EACH
CHALLENGE COMES WITH OPPORTUNITY
. UM AND I THINK YOU'RE EXACTLY
RIGHT. THIS IS A TRANSITION YEAR
AND AS WE WORK TOGETHER THROUGH
THIS TRANS MISSION. I'M I AM
VERY, VERY OPTIMISTIC. IT'S BEEN
A REALLY POSITIVE PARTNERSHIP
WITH THE LEGISLATURE WITH THE
REGULATED COMMUNITY. I AM VERY
OPTIMISTIC. IT'S GOING TO BE A
GREAT YEAR. THANK YOU, MADAM
DIRECTOR TO MISS DELGADO, IF YOU
DON'T MIND, UH TWO PART QUESTION
NUMBER ONE. AS YOU LOOK AT THE
RISE IN COCKTAILS AND GOING INTO
ALUMINUM. UM FOR GALLO. WHAT
DOES THAT LOOK LIKE? OVER THE
NEXT DECADE? YOU SEE THAT TREND
CONTINUING, AND CAN YOU ALSO
TALK TO US ABOUT THE STOCK
THAT'S FLOWING IN THE HALO.
WOULD YOU SAY VAST MAJORITY OF
IT? QUOTE, CLEAN OR. ARE YOU
HAVING A BURIAL WORK WITH THAT
THIRD PARTY VENDOR FOR ANOTHER
HOME FOR THAT? IF YOU CAN ANSWER
THOSE TWO SURE, SURE. SO THE
FIRST QUESTION IN TERMS OF THE
CONTAINER TYPE BEING GOING TO
ALUMINUM. I DO THINK THAT THE
SORT OF THE CANNED COCKTAIL THE
RTD PHASE WILL CONTINUE. TODAY'S
CONSUMER SEEMS TO REALLY RELISH.
CREATIVITY THERE'S MORE THAT
THEY CAN DO WITH THE SPIRIT.
THERE'S YOU KNOW THE MIXERS AND
WHAT HAVE YOU AND COVID REALLY
DID CHANGE. THINKING IN TERMS OF
IF YOU WANT A COCKTAIL, YOU GO
TO THE BAR AND YOU HAVE A
BARTENDER MAKE IT. UM THE
THOUGHT OF KNOW YOUR HOME AND
YOU MAKE YOUR COCKTAIL AND EVEN
BETTER. IT'S ALREADY MADE FOR
YOU. I THINK THAT'S HERE TO STAY
. I DO THINK THAT ALUMINUM FOR
THOSE TYPES OF PRODUCTS IS THE
PREFERRED PACKAGING. THERE IS
SOME. IMPEDIMENTS AT THE FEDERAL
LEVEL FOR GLASS TO BE USED FOR
SPIRITS PRODUCTS. AND SO THAT'S
ANOTHER REASON THAT YOU SEE THE
CANS. UM AND CHANGING ANYTHING
AT THE FEDERAL LEVEL IS GLACIAL.
OH, WITH NO OFFENSE, WITH ALL
DUE RESPECT TO MY FEDERAL
REGULATORS, YES. UM SO I THINK
WE'LL CONTINUE TO SEE THAT TREND
AND WE ARE HOPEFUL THAT THEY'LL
BE CHANGES IN REGULATIONS THAT
DO ALLOW FOR MORE FLEXIBILITY.
BUT THAT'S JUST SOMETHING THAT'S
BUILT IN LONGSTANDING LAWS. WITH
RESPECT TO THE MATERIAL THAT IS
COMING INTO INTO THE FACILITY.
WE DEFINITELY, UM THAT IS ONE OF
OUR BIGGEST CHALLENGE IS THAT WE
DO FACE THE CONSISTENCY IN TERMS
OF THE QUALITY OF THE CURBSIDE
MATERIAL. THAT'S THE VARIABLE
THAT IS ALWAYS DIFFICULT. WE
HAVE A SMALL MATERIAL RECOVERY
FACILITY. THAT 80% OF WHAT WE
GET FROM THEM IS GLASS, AND
THAT'S REALLY HIGH AND THAT'S
THAT'S OUTSTANDING QUALITY. AND
THEN WE'VE GOT SOME WORDS YOU
KNOW, AS LOW AS 40% SO I WOULD
SAY, PROBABLY ON AVERAGE. WE'RE
GETTING ABOUT 50% GLASS IN THE
LOADS THAT WE'RE GETTING FROM
SINGLE STREAM AND THE MAJORITY
OF THE MATERIAL IS COMING FROM
SINGLE STREAM JUST BECAUSE
CALIFORNIA MANY YEARS AGO, SORT
OF SHIFTED TO THAT AWAY FROM A
DUAL STREAM OR SEPARATED STREAM.
UM AND THAT THAT WOULD BE THE
IDEAL IF THERE WAS YOU KNOW,
EVEN JUST ONE. THAT WAS A BEEN
THAT IT'S JUST FOR BEVERAGE
CONTAINERS BECAUSE EVEN HAVING
THE CARDBOARD IN THE PAPER GOING
IN WITH THE ALUMINUM AND THE PET
AND THE GLASS, EVEN THAT, EVEN
THOUGH IT'S JUST THE PAPER
ITSELF IS A CONTAMINANT AND,
FRANKLY ALSO REDUCES THE VALUE
OF THAT MATERIAL IS RECYCLED
MATERIAL. IF IT'S ALSO
CONTAMINATED BY SAYING, YOU
KNOW, GLASS, YOU'RE GOING TO
HAVE BREAKAGE AND SO GLASS GETS
INTO THAT PAPER, AND IT CAN'T
BE. IT'S NOT AS CLEAN YEAH. UM
BATTERIES, AS I MENTIONED ARE
REALLY OUR CONCERN. WE JUST HAVE
SEEN A LOT OF I MEAN THAT FERRIS
MATERIAL. IF IT GETS INTO THE
FURNACE WOULD BE CATASTROPHIC.
SO WE DO HAVE OPTICAL SORTERS
AND YOU KNOW THEY CAN BE
PROGRAMMED TO LOOK FOR SPECIFIC
SOMETHING SPECIFIC, SO IT CAN BE
PROGRAMMED TO LOOK FOR THAT
MATERIAL. AND THAT GETS KICKED
OUT. BUT YOU KNOW THAT THAT
MAKES EVERYTHING MORE COSTLY IN
YOUR AT YOUR PEAK WILL BE ABLE
TO PROCESS HOW MUCH. I DON'T
HAVE THAT FIGURE. UM WE CAN
FOLLOW. I CAN LET YOU KNOW
LATER. YEAH. UM, LONG STORY
SHORT THOUGH. A LOT OF CAPACITY,
RIGHT? YES YES. YES WE DO HAVE
LARGE CAPACITY AND WE ARE
RAMPING UP AND THE HOPE LIKE I
SAID, IS TO BE ABLE TO GET TO
70% RECYCLED CONTENT IN OUR
BOTTLES. I MEAN, IN REALITY WE
COULD USE 100% WE WOULDN'T EVER
JUST BECAUSE THAT STARTS THE
RISK IS, UM THE COLOR. YOU JUST
START TO LOSE CONTROL OVER THE
COLOR OF YOU KNOW, WHATEVER THE
BOTTLE, MAYBE. BUT YEAH, WE'LL
HAVE LARGE CAPACITY AND WE HOPE
TO BE BRINGING IN GLASS FROM ALL
ALL SORTS OF ALL PLACES THAT WE
CAN THANK YOU SO MUCH. THANK
YOU. THANK YOU, MR CHAIR. SO
TOO. MR SMELTERS QUESTION. AND
SENATOR MCGUIRE KIND OF HIT ON
IT IN HIS QUESTION, DO YOU HAVE
WE HAVE 6000 WINERIES? WE HEARD
BONDED WINERIES IN THE STATE OF
CALIFORNIA THAT WE HEARD ABOUT
TODAY WAS AT THE NUMBER. YEAH,
6200 IS THE LATEST NUMBER I HAVE
YES, THAT FOR GOVERNMENT WORK
ANYWAY. UM SO. DO YOU HAVE THE
NAMES AND ADDRESSES OF 6200
BONDED WINERIES? WE HAVE THE
NEXT QUESTION. DO YOU HAVE AN
AGREEMENT WITH ABC TO PERHAPS
GET THOSE TO BE ABLE TO REACH
OUT AND LET THEM KNOW ABOUT
THESE PROGRAMS. THIS PROGRAM, SO
WE DO NOT HAVE A LIST OF ALL OF
THE WINERIES. WE EITHER WE GO
THROUGH THE VERY VARIOUS
INDUSTRY PUBLICATIONS TO GET
THOSE LISTS, SO WE ARE REALLY
RELIANT ON OUR PARTNERS IN THE
WIND INDUSTRY AND THE WINE
INSTITUTE TO PROVIDE INFORMATION
TO THEIR MEMBERS. ABOUT THE NEW
REGULATORY REQUIREMENTS,
ETCETERA AND I DON'T I WILL HAVE
TO GO BACK AND SEE ABOUT THE ABC
. I HADN'T THOUGHT ABOUT THE ABC
INFORMATION HERE AND THERE AND I
, UH I WILL HAVE TO CHECK. I
MEAN, I THINK WE HAVE A LOT IN
COMMON OF YEARS. HOW BIG THE
PUBLIC RESOURCES CODE IS. I
THINK ABC COULD I WAS THINKING
THE SAME THING AS WHERE ARE
THOSE ALIGNMENTS? A YEAH.
SHARING INFORMATION BILL. SO WE
HAVE. AH WE ARE ATTEMPTING TO
REALLY GET TO THROUGH INDUSTRY
ASSOCIATIONS IS BEING UM AND
DIRECT ADVERTISEMENT, AND THAT'S
TYPICALLY HOW WE'VE DONE IT IN
THIS PROGRAM IN THE PAST, BUT TO
MR SPONSORS, 0.6200 NEW MEMBERS
IS A IS A LOT. UM AND SO WE ARE
VERY HOPEFUL THAT THAT THAT THAT
PARTNERSHIP THERE WILL HELP US,
UM GET INFORMATION OUT. OUR
WEBINARS HAVE BEEN SO OUR
HEARINGS OR WEBINARS ARE IN
PERSON. BUT ALSO WE HAVE
PROVIDED THEM ONLINE. THE
LEMONADE OR SILVER LINING OF
COVID HAS GIVEN US THE ABILITY
AND FLEXIBILITY TO BE BOTH IN
PERSON AND OVER THE WORLD WIDE
WEB. SO WE'VE WE'VE HAD OUR
WEBINARS WELL ATTENDED. SO WE'RE
VERY HOPEFUL THAT THAT MEANS
THAT, UM, THAT ARE MANUFACTURERS
ARE PARTICIPATING. OKAY? AND
THEN. MR. OH, GOD. OH, JUST
FOLLOWING UP ON SENATOR
MCGUIRE'S FROM THE STUFF THAT'S
COMING FROM THE MERCE. IT'S
PRETTY. IT SOUNDS LIKE IT'S
PRETTY HARD TO COME UP WITH A
PERCENTAGE BECAUSE SOME MERCER
ON THE NATURAL DO A GOOD JOB
BECAUSE THEY'RE SO HIGH AND
RECYCLING. AND HE SAID THE
SINGLE STREAM SO DO YOU HAVE A
DO? YOU HAVE TO REJECT GLASS
FROM TIME TO TIME? THIS BECAUSE
TOO DIRTY. WHERE IS THE PERSON
THAT THERE IS THERE IS ANOTHER
PLACE WHERE IT GOES, AND THEY
CLEAN IT. NO. SO WE DON'T REJECT
ANY OF THE LOADS. THEY COME IN
AND OUR JOB. WHAT WE'RE DOING
THERE IS PROCESSING IS CLEANING
IT. IT'S REALLY CLEAN IT UP AND
GETTING AS MUCH AS WE CAN. FROM
THAT STREAM IN THE YIELD, YOU
KNOW, THE AVERAGE OF 50% IS JUST
REALLY KIND OF THE AVERAGE OF
WHAT WE'RE GETTING BECAUSE IT
JUST THE QUALITY IS JUST
DIFFERENT, DIFFERENT DEPENDING
ON THE DIFFERENT MURPH SER. BUT
AS I SAID, WE DON'T LOSE ANY OF
THE MATERIAL. SO EVEN IF WE GET
THOSE THE SMALLEST PIECES THAT
THE STUFF THAT'S THE
CONTAMINANTS, WHICH IS
PORCELAIN, UM CERAMICS. THOSE
ARE THE TWO REALLY THE TWO BIG
ONES. THERE IS NO ISSUE FOR THIS
OTHER COMPANY FOR THEM TO USE
THAT. SO WHAT THE FINDING
PROCESS DOES IS IT TAKES THE
GLASS THE LITTLE TINY PIECES OF
GLASS THAT STILL CAN GO INTO THE
FURNACE AND SEPARATES THEM INTO
ONE PILE. AND THEN THAT'S THE
CONTAMINANTS, CERAMIC AND
PORCELAIN ETCETERA THAT IS GOING
INTO THE PILE THAT ARROW THEN
GETS AND THAT THEY THEN USE SO
WE DON'T END UP REJECTING ANY OF
IT. IT'S JUST MORE TIME
INTENSIVE AND COSTLY. THE
DIRTIER THE STREAM IS WE COULD
PROBABLY DO IT FROM THE SELECT
COMMITTEE ON WINE, BUT IT'S KIND
OF A TWOFER BECAUSE RECYCLING
RECYCLING ALL THIS STUFF ISN'T
IMPORTANT TO THE LEGISLATURE. I
WOULD LIKE TO SUGGEST THAT A
FIELD TRIP I KNOW WE TRIED. BUT
WITH COVID. IT WOULD BE VERY,
VERY DIFFICULT. BUT I'D LIKE TO
SEE OUR COMMITTEES PERHAPS GO
DOWN THERE. AND ABSOLUTELY YES.
CHECK THAT OUT. WE WOULD LOVE TO
HAVE YOU YEP. THANKS TO THE
THREE OF YOU FOR TAKING TIME OUT
OF YOUR BUSY SCHEDULES TO BE
HERE TODAY. IT'S REALLY
IMPORTANT THAT WE HEAR FROM YOU
AND I FEEL REALLY GOOD GOING
INTO THIS YEAR THAT YOU'RE BASED
ON WHAT WE HEARD TODAY. THANK
YOU VERY MUCH. THANK YOU. WE'RE
GOING TO MOVE ON TO ANYONE
WANTING TO PROVIDE PUBLIC
COMMENT. ANYONE WISHING TO
TESTIFY MUST LIMIT THEIR
COMMENTS TWO MINUTES EACH. LET'S
BEGIN WITH ANY WITNESSES IN
PERSON HERE IN ROOM 1200
AFTERNOON SENATORS PETER ANSEL
FROM THE CALIFORNIA FARM BUREAU.
I JUST WANTED TO THANK YOU FOR
TAKING TIME TO FOCUS IN ON THESE
ISSUES AS YOU HEARD THE
INSURANCE ISSUE IS REALLY
HITTING AGRICULTURE AND A HARD
WAY. FARM BUREAU MEMBERS FROM
ACROSS THE STATE OF SHARED WITH
ME MANY OF THE STORIES THAT
SOUND EXACTLY LIKE WHAT YOU
HEARD TODAY. FARM BUREAU THIS
PAST YEAR WORKED WITH SENATOR
RUBIO AND CD ON A BILL THAT WAS
FOCUSED IN ON HOW TO DEPOPULATE.
THE FAIR PLAN WILL BE BACK AT IT
AGAIN THIS YEAR AND LOOK FORWARD
TO BEING ABLE TO WORK WITH THE
SENATE ON HELPING TO, UH MAKE
SURE THAT INSURANCE IS AVAILABLE
AND ACCESSIBLE AND AFFORDABLE TO
CALIFORNIANS AND TO CALIFORNIA'S
FARMERS. THANK YOU. THANK YOU.
VERY WELL AWARE OF THE FARM
BUREAU'S EFFORTS. WE REALLY
APPRECIATE THEM. ANYBODY ELSE IN
ROOM 1200 SEEING NONE. NOW,
LET'S BE GO TO THE
TELECONFERENCE SERVICE MODERATOR
. IF YOU PLEASE PROMPT
INDIVIDUALS WAITING TO PROVIDE
PUBLIC COMMENT, WE WILL BEGIN
THANK YOU FOR PUBLIC COMMENT.
YOU MAY PRESS ONE, THEN ZERO. MR
CHAIR. WE HAVE NO PUBLIC
COMMENT. QUÊ. OKAY THANK YOU
VERY MUCH. MODERATOR APPRECIATE
THAT, HAVING HEARD ALL THE
PUBLIC TESTIMONY TODAY MEMBERS
ARE THERE. MR VICE CHAIR, MR
CHAIR. COACH CHAIR. ADDITIONAL
COMMENT YOU'D LIKE TO MAKE THANK
YOU. THANK YOU SO MUCH. AH SO IF
THERE IS NO QUESTIONS WERE WE'RE
GONNA HAVE SOME CLOSING REMARKS
OR NO GOOD. LET'S ALL BE GOOD.
AND THIS IS REALLY BEEN. I THINK
A EYE OPENING YOUR PUBLIC
HEARING FOR THE FOR OUR THE WINE
INDUSTRY COMMITTEE SELECT
COMMITTEE ON WINE AND I WANT TO
THANK ALL THE INDIVIDUALS WHO
WERE HERE TODAY TOOK TIME OUT OF
THEIR BUSY SCHEDULES. BOTH THE
PEOPLE ALL THE PEOPLE THAT
TESTIFIED AND THOSE THAT SAT
THROUGH AND LISTENED AND TOOK IN
A LOT OF THIS FANTASTIC
INFORMATION. I WANT TO THANK
EVERYBODY FOR YOUR PATIENTS AND
COOPERATIONS. WE CONCLUDED THE
AGENDA. THE SENATE SELECT
COMMITTEE ON CALIFORNIA'S WINE
INDUSTRY IS ADJOURNED FOR YOU,
RIGHT.